Success Story - "Packaging Materials and Supplies"
Privately held market leading manufacturer of medical, dental and animal health equipment.
Company Situation and Problem
- Multimillion-dollar corrugated and packaging supplies spend with 13 incumbents
- Approximately 500 items with sub-categories (corrugated, foam, misc. supplies and poly bags)
- Multiple plants involved – Long term supplier relationships in tight-knit community offering extra value services
Paladin Actions & Recommendations
- Internal stakeholder engagement to identify non-price requirements and KPIs
- Supplier survey to gather data on non-price criteria
- CombineNet’s advanced optimization solution enabling flexible bidding & various scenario analysis
- 33 potential suppliers invited to bid; 15 participated
- Pre-bid meetings with the incumbent suppliers and new bidders; supplier technology training
- Bid evaluation and scenario analysis including alternate bids and product substitutions
- Preliminary recommendation and further scenario analysis with customer
- Short-list supplier visits
- Business awards
- 28% savings while protecting incumbents, where appropriate
- Reduced supply base to 7 suppliers
- Implemented indexed pricing for corrugated
- Maintained service levels
Advanced sourcing optimization enabled a more efficient and effective sourcing process: more bidders, alternate bids, conditional offers, and bundled bids. It also facilitated the involvement of internal stakeholders which garnered support for the final award: 28% savings while reducing the supply base and maintaining stringent service requirements.