Supply chain and operating model design for food services company

Situation:

• Catering company with various production units aimed to create a pan-European supply chain and buying structure
• The company sought to leverage its scale in buying and capture operational synergies across its network

Actions:

• Set up a European buying company with defined organizational structure, roles, and responsibilities
• Designed processes and key interfaces with country-level and local production units
• Analyzed current product portfolio, identified opportunities for standardization and developed a central product catalogue with specifications, pricing, and supplier information
• Established processes for catalogue maintenance and new product introductio
• Designed supply chains for European-wide buying and delivery with specific policies for fresh, frozen, and ambient food and beverages
• Considered lead times, inventory levels, and transportation costs
• Conducted network analysis to determine optimal warehouse and distribution center locations
• Tendered warehousing and transportation services through detailed RFPs
• Conducted competitive bidding and evaluated proposals based on cost, service levels, capabilities, and alignment with objectives
• Negotiated conditions and SLAs with selected logistics providers
• Finalized contracts with selected logistics partners

Results:

• New European buying company set up, staffed, and operational
• Established centralized procurement organization driving significant material cost savings through harmonization/standardization and effective negotiations
• Rolled out harmonized product catalogue across Europe
• Multi-temperature supply chain contracted with ~20% negotiation success vs. initial bid
• Enabled better demand planning and inventory management
• Achieved a total of ~15% landed cost savings on spend including logistics