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  • Margin enhancement

Margin Enhancement

Problem:

A large retail chain suffered with low margins with a few important suppliers – we were asked to develop and manage the implementation of a margin enhancement strategy.

Solution:

We came up with a number of margin improvement suggestions, targeting the specific areas of operations both inside and outside of the organisation. The strategy covered supplier optimisation, manufacturer efficiency improvement plans, product engineering, packaging reduction and improvements in supply chain & logistics. We collaborated with the buying and supply chain teams to gain their full engagement. We also developed joint business plans with key vendors.

Economic Value:

This resulted in more cost effective, sustainable supply and very supportive, reliable vendor base. Above all, the main goal of a higher profit was achieved. This was done not by simply asking suppliers for cost reductions, a method that hardly ever works, but by actively looking for ways to eliminate the inefficiencies on both sides.

Social Value:

The suppliers felt more engaged as they were involved in the initiative. They became our client’s true and loyal partners. Together we managed to reduce some redundant packaging and waste. We minimised the number of half empty lorries on the roads and shipping air in containers. Some of the products were re-designed in a way to use less material, without compromising quality.