PACKAGING CASE STUDY
Corrugated Packaging Tender and Benchmarking
A leading provider of fresh food at home and recipe boxes with multiple distribution centres across the UK
The company sources its cardboard boxes from a single supplier and was facing a 5% price increase due to changes in market dynamics. The current price structure has not been reviewed for a while, therfore a competitive tender was conducted with the aim of extracting value and innovation from the appointed corrugated packaging supplier.
To avoid a 5% cost increase
The strategy was to review current board specifications, aggregate and leverage the company’s buying power underpinned by a price escalation mechanism.
Working closely with the company, an open tendering process was undertaken with global and regional packaging firms invited to tender.The aim was to have a good understanding of market rates and use it to develop a negotiating strategy.
• 14% price reduction
• 5% cost avoidance
• Consignment Stock
• Quarterly reviews with value engineering proposals
• Service credits for late deliveries