CASE STUDY - SUPPLY CHAIN (INGREDIENT SOURCING)

The Challenge

Confronted with inefficiencies in procuring materials through brokers and distributors in the USA, our client aimed to simultaneously cut costs, improve on-time delivery, and uphold product quality.

The Solution

A comprehensive approach was adopted to address the client's challenges, focusing on direct material sourcing from origin and implementing a Foreign Supplier Verification (FSV) framework for multiple facilities. Key steps included:

1. Direct Material Sourcing: Transitioned from brokers and distributors to direct material sourcing, ensuring a streamlined and cost-effective supply chain.

2. Foreign Supplier Verification (FSV):

• Quality/Safety Assessment: Evaluated each supplier for adherence to quality and safety standards, ensuring materials met the highest industry benchmarks.

• Responsiveness Evaluation: Assessed suppliers based on responsiveness to dynamic market demands, emphasizing timely and agile supply chain operations.

• Pricing Analysis: Conducted a thorough analysis of pricing structures, negotiating favorable terms with suppliers to optimize cost-effectiveness.

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The Results

The strategic solution yielded impressive results, transforming the client's procurement processes:

1. Cost Reduction: Achieved a significant 16.67% reduction in overall spend, validating the effectiveness of transitioning to direct material sourcing.

2. Carbon Footprint Reduction: Despite an international supply chain, the client experienced a commendable reduction in their overall carbon footprint, aligning with sustainable business practices.

3. On-Time Delivery Excellence: Maintained an impressive 97% fulfillment rate, showcasing the successful optimization of the supply chain for enhanced on-time delivery.

This case study underscores the impact of a holistic approach to procurement, combining direct material sourcing and a robust Foreign Supplier Verification (FSV) framework. By embracing this transformative solution, our client not only met their primary objectives but also emerged as leaders in sustainable and efficient supply chain management.