How a Major Food Packaging Company Saves 20%+ Every Year on MRO

MRO-Food-Packaging

Overview

In 2016, a food packaging manufacturer connected with Procure Analytics’ group purchasing program for MRO supplies. While the Member’s 50 production facilities were moderately consolidated with an incumbent supplier, PA’s program showed significant savings opportunities if the company switched suppliers.

Challenges

To achieve initial benchmark of 15% savings on existing spend, the food manufacturer agreed to converting general MRO to PA’s preferred supplier, which included changing out 270 vending machines at the facilities and getting local purchasing managers on board with converting suppliers.

Approach

PA pilot tested among a handful of facilities near Member headquarters in order to show proof of concept and visibility of spend and savings. The Member company’s MRO purchasing included messy and missing data, prompting PA and PA’s Supplier to visit multiple sites and confirm records against location inventory.

These site visits included checking inventory in the Member’s existing vending machines. In many cases, the company had no on- hand inventory records and PA’s Supplier physically took pictures of the machines and assessed their inventory levels at each site.

After the two month pilot, PA coordinated full roll out to all facilities, and installed 270 new vending machines. After roll out, PA’s focus pivoted to compliance tracking and approved-PPE list tracking.

Results

Under normal circumstances, installation of new, stocked vending machines at one location would take 30-60 days; PA and PA’s supplier installed machines at 40+ locations with 90 days.

The site-level approach combined with a strong corporate sponsor drove adoption during conversion to the new MRO supplier. PA’s team tracked compliance by location and visited Member sites regularly to ensure smooth implementation. These hands-on methods lead to beating initial expectations. By the end of Year 1, the Member company’s realized value of joining PA outperformed initial benchmark at 20% actual SKU-level savings.

PA didn’t stop there. Each year, Procure Analytics has worked with the Member company to consolidate and optimize spend through the program to grow savings.