With profound financial know-how and expertise in product groups, our consultants pinpoint untapped optimization potential in your portfolio company in the areas of procurement and supply chain management.
Our analysis of the private equity industry
Naturally, the aim of private equity firms is to acquire suitable companies and develop or optimize their portfolio companies. In this connection, cost savings in procurement and the supply chain directly increase the company value, and consequently the portfolio company’s resale value. Accordingly, private equity firms have already recognized existing profit potential in procurement and the supply chain. Recently, the trend here is increasingly moving away from separate optimization of individual purchasing departments in the relevant portfolio companies. Rather, cost-cutting programs in procurement are being conducted across companies by, for example, bundling the purchasing volume in indirect procurement (e.g. services, transport, packaging, etc.) between the portfolio companies. Analogously, logistics or production processes and costs are also increasingly being compared in the area of supply chain management across and beyond all portfolio companies in order to tap possible synergistic potential between the companies.
We know the requirements private investors place on a management consulting firm and can ensure that we master the challenges for you due to many years of close collaboration with our clients from the private equity sector. The following example is correspondingly only one of the many projects that we have conducted for our international customer base in the private equity landscape.
Portfolio analysis of procurement and supply chain management
We consulted selected portfolio companies in the area of procurement and supply chain management for an internationally leading private equity firm. The optimized portfolio companies involved, among others, a leading German retailer in the luxury goods industry or a chain store of bakery and confectionery products with more than 200 branches Germany-wide.
Levers for the project’s success:
- Our consulting team’s profound financial know-how combined with extensive expertise in product groups
- Build-up of a multi-dimensional spend cube in a SQL database, which made it possible to benchmark the various branches, segments and suppliers, and therefore thoroughly prepare for negotiations Individually tailored degree of implementation logic to track realization of P&L-relevant savings during the course of the project
- Regular coordination meetings with top management of the portfolio companies, the responsible partners of the investors and representatives of HÖVELER HOLZMANN CONSULTING
Results of the project:
- Transparency was created in the procurement data across and beyond all portfolio companies
- For a purchasing volume considered in a low nine-digit range, significant savings were achieved depending on the portfolio company in a high one-digit percentage range.