One of our client companies was facing price pressures due to the significant levels of competition in food retailing. They felt they had negotiated all the reductions they could based on their current spend volumes. They asked Electool to assist in generating further reductions. Electool suggested combining selected category spends with other companies’ spends, in order to leverage the total expenditure. Electool helped identify and bring together non-competing companies to work together in a category-based group.

Leveraged buying of packaging materials:

Situation:

Two of Electool clients' sourced similar packaging materials. Similar suppliers were used in previous negotiations on the product. However there were significant differences such as the required term of contract and the distribution requirements (in terms of locations, frequency and time sensitivity).

Action:

Electool communicated to potential suppliers the opportunity to win multiple clients’ business in a ‘morning’. Client side differences of distribution and terms were dealt with by adopting separate ‘lot’ strategies. Electool introduced three new suppliers to bid who had never bid for clients business previously. The event was managed at Electool offices using the special reverse auction centre.

Results:

Clients achieved savings on categories that they regarded as having no further potential for savings. They gained access to new high quality suppliers and clients saved more than 12 % on a combined spend of more than 11 million HUF.