Unlocking best value through collaboration™ 
MHE, Fuel Cards, Fleet procurement support

LOGISTICS CASE STUDY  

Materials Handling Equipment Tender 

THE COMPANY  

A leading food production group with multiple production facilities across the UK. 

THE SITUATION  

Material Handling Equipment costs for this food group was escalating and they required procurement support to understand cost drivers. Although they do have a group contract, it has not been managed properly because there are currently varying end dates for each truck thus creating supplier lock-in. 

THE OBJECTIVE  

With a high switching costs, the objective was to benchmark and renegotiate with the incumbent to reduce costs and align contract end dates across the group in order to facilitate future tendering. 

THE STRATEGY  

The strategy was to renegotiate the following cost buckets: 
• Rental costs 
• Finance costs 
• Repair costs 
• Maintenance costs 

THE APPROACH  

An analysis was undertaken to gain an insight into how the incumbent perceived its existing business with the client. Following this analysis, it was quickly identified that the company is an important customer to the client and could leverage its spend. 

THE OUTPUT  

• 5-year contract negotiated and awarded with annual cost down targets 
• All new trucks to align with contract termination dates 
• Upgrade to gel batteries 
• Upgrade existing battery chargers 

CONTACT GATEWAY PROCUREMENT 01482 645 844 | enquiries@gatewayprocurement.co.uk   

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