Big savings without cutting corners—sound impossible?
In our latest podcast based on a GEP case study, we unpack how a global fast-food chain slashed $22 million in direct materials procurement costs while strengthening its commitment to ethical sourcing.
Learn how this industry leader:
- Leveraged supplier realignment to meet animal welfare goals.
- Conducted value chain analysis to uncover hidden inefficiencies.
- Partnered with GEP to create a sustainable, cost-effective supply chain.
PODCAST SUMMARY
The podcast discusses a global fast-food chain’s journey to addressing rising costs in pork procurement, which amounted to $545 million annually across 16 plants in five markets. The company faced a unique challenge: balancing cost savings with its commitment to improved animal welfare standards.
They partnered with GEP to tackle this issue. GEP’s approach aimed to optimize sourcing strategies without compromising the company's ethical goals.
GEP’s Strategic Sourcing Approach
GEP conducted a supplier market scan across North America to identify potential partners who aligned with the company’s animal welfare standards. They performed a value chain analysis to identify inefficiencies and used tools like should-cost modeling to benchmark fair prices for procurement. This helped identify cost-saving opportunities while maintaining quality and ethical standards.
A Request for Proposal (RFP) was issued to 10 suppliers, including five incumbents. Each supplier was evaluated based on cost, quality, sustainability practices, and animal welfare standards. GEP’s detailed analysis also factored in transportation costs and market share projections to ensure well-informed negotiations.
Results Beyond Savings
By applying their data-driven approach, GEP secured contracts with suppliers that aligned with the company’s ethical standards while achieving $22 million in savings over three years. The podcast highlights that this initiative also improved supply chain resilience by diversifying supplier networks and reducing risks. Furthermore, streamlining procurement processes minimized hidden costs, enhanced efficiency, and reduced the environmental footprint.
