Managing procurement doesn’t have to mean juggling dozens of suppliers and wasting money on redundant SKUs. A leading supermarket chain with over 500 stores faced these very challenges during the pandemic — until they partnered with GEP.
With strategic sourcing powered by GEP SMART, the retailer transformed its procurement process, consolidating suppliers, streamlining SKUs, and saving millions of dollars in costs.
Listen to this podcast based on a GEP case study to learn how strategic sourcing can unlock hidden value in your supply chain.
What You'll Hear:
- How analyzing 3 years of spend data uncovered hidden inefficiencies
- The power of reverse eAuctions in driving competitive pricing
- Practical strategies to future-proof your procurement processes
PODCAST SUMMARY
The podcast begins with the story of a supermarket chain that managed to turn packaging chaos into significant savings, amounting to $25 million. The speakers highlight that the company with over 500 stores was dealing with supply chain issues during the pandemic. Instead of just trying to survive the chaos, the company used the opportunity to revamp its procurement process, starting with packaging. They teamed up with GEP and analyzed three years' worth of spending data. They discovered inefficiencies, such as juggling over 100 different suppliers for plastic and gloves, leading to hidden costs. By rationalizing their stock-keeping units (SKUs) and reducing their supplier list from 108 to 41, they gained leverage to negotiate better deals and achieve bulk discounts.
Strategic Sourcing and Reverse Auctions
The speakers discuss the concept of strategic sourcing and how it played a crucial role in the supermarket's success. They explain that strategic sourcing is not just about getting the lowest price but about looking at the whole picture and finding better ways to do things. The supermarket also implemented reverse auctions, where suppliers compete in real-time to offer the lowest price on packaging. This transparent process keeps prices competitive. The combination of streamlined SKUs, consolidated suppliers, and reverse auctions led to significant cost savings. The speakers emphasize that strategic sourcing can be applied to any business, regardless of size, and is about working smarter, not harder.
Building Resilience and Supplier Relationships
The podcast also touches on the importance of building resilience and strong relationships with suppliers. By consolidating suppliers, the supermarket reduced its vulnerability to supply chain disruptions. It built resilience by having a mix of long-term contracts for essential items and shorter-term agreements for other items. The speakers stress that procurement is still about people and building good relationships with suppliers is crucial. Viewing suppliers as partners rather than just vendors creates a win-win situation, where both parties benefit. The speakers conclude by highlighting that strategic sourcing is an ongoing process of evaluation, optimization, and adaptation.
