cost modelling and benchmark pricing for a large European retailer

  • business challenge

    Declining sales prompted a range review that aimed to increase revenue through product innovation. Procurement was challenged to manage product costs to ensure profitability whilst meeting quality expectations.

  • our approach

    Following detailed analysis we focused on improving and standardising specifications – using cost modelling and benchmark pricing to support supplier negotiation.

  • findings of tool

    We used our tool to analyse and identify margin dilutive products. Specification was identified as the most effective lever for negotiation.

value delivered

  • Savings delivery of ~ €200K
  • Designed profitability into new products
  • Product cost reduction of approximately 18%
  • Improved time-to-market speed
  • Greater visibility of key cost drivers and supply risks
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