Organic Produce Supplier Harvests Big Savings with New Corrugated Packaging Source

Our initial analysis showed that opening up the bid process to a broader supply base and creating greater transparency would result in a supply partnership that was more beneficial to the client.

Solution #1 – Enhanced bid process
Our first step was to expand the clients potential supply base. The initial bid conducted by our client had been limited to only the two incumbent suppliers.  With more suppliers, of various sizes, participating in the bid process, our client could open themselves up to savings and more favorable supply dynamics through greater competition.

Before the bid process was rolled out, however, we worked with the client to create broad internal user groups to generate a detailed portrait of the ideal supplier qualifications and relationship. These groups represented employees from across the company; from machine operators to marketing managers, who all interacted with the corrugated packaging in one degree or another. Together, they not only collaborated on a model for the most effective business relationship with their future supplier, but documented every exact specification necessary for all corrugated packaging products bought through that supplier. This process led to the development of detailed RFI and RFQ documentation, and even resulted in several supplier facility visits. The client was now better equipped to compare terms between bids and set high, but achievable expectations for supply partners.

Solution #2 – Drafted comprehensive supply agreement
Once the client decided on a supplier, we helped them develop a new, more comprehensive Supply Agreement that was mutually beneficial to our client and the supplier. The new agreement contained features including clearly spelled commercial terms and material escalation / de-escalation clauses as well as  lead-times, forecast communications, expectations for competitive pricing, reasons for termination beyond breach of contract, assurance of supply, and other legal commitments as agreed upon by both parties.

Furthermore, the new Supply Agreement served as a baseline for other packaging material contracts that would be executed as our client continued to roll out their new sourcing process.