Full diagnostics identifies incremental savings opportunities

The Client

A global provider of food and leisure services to multiple industry sectors across 50 countries and more than 50,000 client locations.

The client was facing customer price challenges along with inflationary pressure for some of the goods and services required to fulfil their recognised excellent quality and HSE standards. The existing Procurement and Supply organisation had developed plans to reduce inbound costs, Odesma were brought in to support these plans.

The Objective

To identify incremental opportunities for the business by providing a full review of the commodities purchased across a complex food supply chain and deliver a full diagnostic and opportunity assessment.

Odesma Impact

Odesma deployed a small but senior team of subject matter experts to deliver this project.  Working on site and in collaboration with the existing team and business executives Odesma delivered a full review and assessment of the client’s current supplier and supply chain portfolio, developing a detailed sourcing program and business case to deliver opportunities.   

The diagnostic process included:

  • A deep dive evaluation of existing contracts in order to verify addressability of spend during financial year 17/18. This included a review of supplier base performance focusing on delivery accuracy, supply chain efficiency and market price effectiveness.   
  • Actual price benchmarking vs market indicators and external data points for a portfolio of goods that represented 85% of spend and SKU lines in order to identify price led opportunities for cost reduction. 
  • Full SKU/ product specification review in order to understand existing specifications and identify opportunities for product specification enhancement.  The product and specification evaluation included a review of the supply chain structure for optimisation/ improvement opportunities
  • Opportunity Assessment; From the collected data Odesma were able to construct a category wave plan based on benchmark findings and confirm incremental opportunities vs existing plan and business constraints. 

The Results

Following the diagnostic process, examining 85% of annual spend and talking to over 80 existing and potential new vendors, the team identified >£10m of incremental opportunity through sourcing, supplier management and supply chain optimisation actions. The improvement plans were prioritised vs complexity, business risk, and cost of implementation to enable actions to be planned in alignment with business goals and cognisant of existing resource commitments.