Unlocking an additional 14% in value

Our large CPG Client was facing the highest inflation experienced in 40 years. However, during an unexpected downturn, there was an opportunity to take advantage, accelerate productivity, and optimize key spend areas. One of which was packaging. Although our client had a mature procurement organization in place, there was a lack of capacity, external perspective, and competitive benchmarking insights required to identify saving opportunities within its global packaging spending.

In recent years, our clients have experienced price increases from packaging suppliers, citing COVID and capacity constraints as the cause. However, with 70% of contracts expiring within the year, Proxima was engaged to help regain leverage and optimize new agreements.

Approach

Over an accelerated Opportunity Assessment Program, Proxima leveraged category expertise and partnered with our client to identify, refine, and recommend incremental saving initiatives that were readily actionable and prioritized in line with organizational goals.

Through utilizing our proximity to the market, our team curated knowledge and insights relevant to our client’s challenge, including current supplier capacity in the market, an understanding of incumbent suppliers’ strengths and weaknesses, and potential alternative suppliers and solutions that could meet our Client’s requirements.

Applying this insight, and with our category experts leading the charge, we identified saving opportunities across each area of the category. We developed the opportunities through a mix of levers, including value engineering, process review, should cost modeling, and logistics. 

Results

We identified >$70m savings across the sub-categories within packaging spend, presenting actionable initiatives that not only reduced costs but also reduced waste, harmonized specifications, and drove efficiencies.

Alongside, our team worked collaboratively with the client team throughout the program, ensuring stakeholders were engaged and brought on the journey as initiatives were developed.