Chemical Products Manufacturing
Direct Sourcing Execution in Manufacturing and Distribution
Our Impact
$4M Saved
The Challenge
- CEO set a 12-month target of $4-6M in Direct Materials run-rate savings following a strategy consulting firm’s diagnostic identifying that range of savings was available from within the company’s entire COGS
- The procurement team needed to develop a credible plan to reach the $4-6M target and show progress toward that goal within 12 weeks
- The procurement team was fairly junior as well as under-staffed so Tezing was engaged to help drive the needed results
The Journey
- Tenzing conducted a detailed analysis of the spend and key supplier contracts to develop a pragmatic approach to save costs with a focus on the following key categories of spend: Chemicals, Aerosols, and Packaging
- Tenzing worked with the Procurement team to identify which sub-categories of goods needed to go to RFP vs those available for direct negotiations (400+ products and 50+ suppliers were included in the Chemicals category alone)
- Key stakeholders from across the organization were closely engaged during the sourcing, negotiations and contract award processes to ensure full alignment and sustainable decision making
The Results
- Targeting only 12% of Direct Materials spend, savings exceeded $4M
- Supplier management was streamlined by halving the number of active supplier
- Tenzing accelerated time to savings by working hand-in-hand with the Procurement team and coaching team members through the sourcing and negotiation strategy to contract award process