cost reduction

We understand the pressure businesses are under to deliver against budgets and exceed stakeholder expectations. Our cost reduction teams work closely with clients, developing innovative solutions to cost challenges that deliver tangible results.

Increasing price pressures coming from both raw materials and increasing overheads is regularly cited as the number one business concern. Resource-strapped procurement teams are under huge pressure to maintain spend under management while mitigating external factors that are driving high costs and lower margins.

Our cost reduction service provides clear visibility of your category spend and generates actionable insights using tools, costing models and benchmarks to recommend rapid and sustainable cost reduction across your organisation.

Our Control > Optimise > Transform framework of ‘cost out’ and ‘value in’ procurement levers and bespoke 4SPEND analytics service will identify opportunities for unlocking new value. Our experienced team of procurement practitioners will then work closely with your stakeholders to create an appropriate plan of action.

Our procurement practitioners give your business access to a vast range of experience in driving tangible results. We use methodologies tried and tested with clients across all sectors and geographies but customise them to align with the specific needs of your business. Together, we’ll track the results of our procurement enhancements using simple, interactive dashboards and ensure we consistently deliver EBITDA improvements.

European general merchandise retailer

Accelerated savings delivery programme covering all areas of indirect spend.

The food market in operates on tight profit margins and is extremely competitive. 4C was first selected to work on a targeted savings programme which after delivering significant quick wins, 4C was chosen to provide a second generation outsource to deliver longer term strategic initiatives. The subsequent steps of the collaboration has seen both companies work together to move the current project beyond tactical procurement and into true cost transformation.

  • Worked with the senior leadership team over a 4 week period to build and validate a robust opportunity assessment.
  • Built and executed a multi-workstream programme of 30 sourcing and demand management projects in 8 months.
  • Engaged stakeholder community with robust comms plan to change perceptions.
  • Programme extended for 3 years

value delivered

  • 19% savings on 3rd party expenditure.
  • Attributed with helping develop a culture of cost consciousness right across the company.
  • Improved the profitability of the company and made it more attractive for external investment. 

UK wine and spirits retailer

GFR and GNFR Cost Review Program

A leading UK retailer, specialising in fine wines with 211 stores across the country. In 2015, the business acquired an online wine retailer. The retailer had a budget deficit of circa £1m in year and were introducing budget challenges for the next financial year. 4C were chosen to conduct a full cost review of the GNFR and GFR spend to identify the areas of opportunity for both organisations.

Opportunity Diagnostic

  • deep dive review of budgets and contracts vs 4C benchmarks and validation workshops held with stakeholders
  • identified savings of £2.1m against a GNFR spend of £19m


GNFR

  • implemented a multi-category strategy approach across all BUs, with market reviews
  • RFxs/eAuctions and supplier negotiation


GFR

    • ran supplier partnership programme across non-core ranges, generating efficiency enhancements and improved way of working

value delivered

  • exceeded savings target significantly by 62% – £3.4m vs £2.1m
  • increased control across the organisation by implementing PSLs and framework agreements
  • implemented supplier efficiency savings by consolidating the supplier base across both organisations
  • built internal credibility for procurement

European food manufacturer

Accelerated savings delivery programme covering all areas of indirect spend.

The food market in operates on tight profit margins and is extremely competitive. 4C was first selected to work on a targeted savings programme which after delivering significant quick wins, 4C was chosen to provide a second generation outsource to deliver longer term strategic initiatives. The subsequent steps of the collaboration has seen both companies work together to move the current project beyond tactical procurement and into true cost transformation.

Outcome based framework centred around two core service streams:

Category Management for Indirect Spend:

  • strategic sourcing
  • RFx/e-Auctions
  • supplier Relationship Management

Cost Transformation Projects, including:

  • in-sourcing/Outsourcing
  • range reviews
  • supply chain mapping
  • process re-design
  •  

value delivered

  • exceeded savings targets in the first two years (by 8.5 per cent and 15.5 per cent)
  • overseen major changes to business structure, reporting methods, changes to client systems and policies
  • built director level relationships across Indirect portfolio
  • built internal credibility to allow strategic non-procurement cost base focussed projects to be launched

"4C have been working with United Biscuits since 2009 and have enabled a step change from procurement savings to delivering cost transformation. The team 4C put in place has over-delivered on all objectives and proved themselves to be constant innovators; always looking for processes to optimise or leading edge technology to deploy. We are extremely pleased with the results achieved and I wouldn't hesitate to recommend them."

Edward Fuchs, (former) Group Procurement Director when company known as United Biscuits

UK general merchandise retailer

COGS Reduction and Margin improvement programme

A top 10 national general merchandise retailer with over 400 stores selling a mix of branded and private label products. Following an 8-week diagnostic, we were engaged to deliver ambitious cost reduction and margin improvement targets. Lack of access to commercial data and a core sourcing capability was not identifying alternative suppliers restricting competitive tension. Core suppliers not treated consistently and key category decisions lacked customer / market insight

  • built a wave plan of activity with each of the category leads that balanced buying better, product mix and trading strategy
  • reviewed all spend areas against 4C Retail procurement levers to each sub category to understand potential scope for deployment
  • agreed timelines and benefits phasings for 200+ projects ensuring alignment to Right Customer Choice
  • agreed Baseline and Savings methodology for each project to show how benefits will be measured and tracked
  • ensure governance in place so client and consultancy team deliver to plan
  •  

value delivered

  • CGM improvement of 1% in year 1 with an incremental 2% for year 2
  • incumbent team challenged with new approaches to sourcing challenges and new ways of preparing for negotiations
  • delivered dashboard toolkit that put data at the fingertips ensuring data-based decision making