With their excellent insights into the market, our consultants pinpoint untapped potential and savings opportunities for your trading company in the areas of procurement and supply chain management.
Our analysis of the trade industry
Around one fourth of all commercial companies in Germany are registered as trading companies – this underscores the tremendous importance of trade within the economic cycle. Trading companies include trading intermediaries, wholesalers and foreign trade companies as well as retailers.
In the process, wholesale and trading intermediaries act as a link between industry, craft and retail. Foreign trade opens up sales opportunities for the industry in an international context and supplies domestic consumers with imported goods from all over the world. Retail distributes goods and services directly to the end consumer and revitalizes numerous urban areas.
Trade is both a major employer in Germany as well as an important trainer. The contribution of wholesale and retail to the gross domestic product is around 10 percent.
Optimizing in-house production facilities of a retail and wholesale company from Switzerland
Our customer is a retail and wholesale company from Switzerland, and a true heavyweight in trade with sales of more than CHF 70 billion and around 77,000 employees. Alongside supermarkets, also managed under the umbrella of the company are restaurants, DIY/home improvement companies, pharmacies, convenience shops, a bank and a number of other companies. In addition, companies without a direct link to the brand belong to the group of trading companies. For example, these include a freeway restaurant company in Switzerland and a catering and commercial wholesaler.
The HÖVELER HOLZMANN CONSULTING team was brought onboard to boost the profitability of the in-house production facilities, the various products ranging from wine, to chocolate through to the manufacturing of detergents. Within 22 months from kick-off up to the last steering committee meeting, procurement of the in-house production facilities was initially analyzed, reviewed in-depth regarding savings potential and then optimized in terms of purchasing conditions, structures and processes.
Levers for the project’s success:
- Organizational separation of the entire project into the two main fields: "optimizing purchasing conditions" and "further developing the purchasing department"
- Comprehensively conducting potential analyses for more than 50 product groups
- Setting up a wave plan for efficient processing of the single product groups
- Conducting tenders and (re-) negotiations for optimum realization of savings potential identified
- Holding steering committee meetings on a regular basis to involve top management
- Conducting training programs on various procurement topics (including strategic sourcing, supplier management, negotiation management, etc.) for the staff in procurement to ensure a transfer of know-how
Results of the project:
- Main result of the sub-project "optimizing purchasing conditions" was the achievement of savings in procurement from a double-digit percentage to an eight-digit CHF amount. This enabled prime costs of in-house production facilities to be tangibly reduced, so that expectations on the main project objective (higher profitability) were exceeded.
- Main result of the sub-project "further developing the procurement organization" was the realignment of the purchasing department with a higher degree of centralization (establishment of the position of central procurement of packaging for all in-house production facilities). This created the basis for the long-term safeguarding of savings achieved and optimization of the work processes.
- In addition, the training programs conducted led to a transfer of know-how.