Cost Optimisation
Working with a hospitality chain to identify cost optimisation opportunities and to assess the procurement function to deliver long term benefits.
To discuss how we can help you with similar challenges please contact Gavin Bowen-Ashwin.
The Problem
- Due to expanding their estate of managed pubs (over 350) and leased pubs (over 1000) with plans to grow further over coming years, the indirect spend of this pub chain has increased.
- However, the visibility and control of indirect spend was limited due to recent pandemic and inflationary market pressures.
- The procurement team was below capacity and focused on direct spend, whilst some indirect categories were managed within the business with limited procurement support.
The Solution
- One of the 4C team led a two-phase diagnostic within 8 weeks – the first phase focused on data gathering and creating high level financial opportunity assessment and the second phase as a deep dive diagnostic into selected spend areas and overall procurement capabilities.
- They developed a project list of savings opportunities with an implementation plan, including a clear roadmap to achieve the benefits that can be obtained and an improvement plan for systems and processes to protect the savings achieved.
- The detailed plan was set out with the steps towards selling indirect spend support to the leasehold pubs as a managed service.
The Impact
- Identification of significant savings in consumables, disposables and chemicals, cleaning services and washrooms leading to a reduction of 10% on spend and procurement process controls being set up.
- An implementation plan was established to deliver quick results within 3 months of the project start followed by a set up of technology for the ordering process by leased pubs to achieve further benefits.
- A high-level end-to-end design for the procurement function was created to ensure control and to enable the business to carry out sourcing with added procurement support.
Published
June 6th 2023