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Raw materials cost reduction

Raw Materials Management Consulting

Professional raw materials management ensures price reliability, cost reduction and a significant competitive advantage in raw materials procurement

Exchange rate fluctuations, political crises, trade restrictions and many other external influences can complicate the efficient and cost-effective procurement of raw materials. Successful raw materials procurement not only depends on the performance of your procurement, it relies on a number of external factors, whose risks can only be mitigated through targeted actions.

Establishing professional raw materials management not only minimises risks, it also provides planning security, which gives you a significant competitive advantage. This means that you can efficiently commit your procurement resources to your core strategic activities for the long term, while the competition is forced to concentrate on complicated procurement conditions.

Thanks to our many years of experience consulting on raw materials procurement, we have identified the four main levers that have proved successful for our clients in critical phases and difficult conditions. We divide raw materials management into detailed sub-fields, focusing on each one in turn to ensure that, as a whole, it is comprehensive and sustainable.

 

How do we do it?

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Transparency of demand and analysis of the raw materials market

In analysing the raw materials market, our sector experts continuously examine both the market development of raw materials and the market for raw materials suppliers. Thanks to our specialist knowledge and our Competence Centre for Raw Materials Management, our data is always up-to-date and covers raw materials demand for the food industry, the pharmaceutical sector and the automotive and electronics industries. We also establish transparency of demand for your raw materials procurement in order to achieve the highest possible level of efficiency when optimizing your procurement. We perform quantity and cost breakdowns, create a raw materials matrix and widen your perspective by achieving transparency throughout your supply chain.

Commercial levers

Commercial levers include demand-specific tenders and negotiations to identify suitable and alternative suppliers for your specific needs, concluding individual contracts such as fixed price agreements, indexing or fixed purchase volumes. The primary aim here is to increase security of supply and reduce procurement costs.

Hedging

Hedging is a proven method to protect against price fluctuations and supply shortages. There are several types: physical hedging, operational hedging, supplier hedging and financial hedging. Targeted hedging minimises price and supply risks. We work with you to develop and implement the appropriate hedging strategy for your raw materials procurement.

Technical levers

The use of technical levers has the potential for further savings and reduces your dependence on natural resources. We achieve this by reducing your use of raw materials, reviewing and, if necessary, using substitutes and developing new products.

Sales levers

Coordinating procurement and sales strategies also has the potential to minimise risks. Our raw materials consultants work with you to foster collective strategy development. Coordinating procurement and production and having open-book contracts harmonises price conditions and, ideally, passes any risks onto customers. The targeted sales of alternative products also ensures more security for your raw materials management.

 

Raw materials workshop
We also offer a raw materials workshop to enable the targeted identification of potential and optimization opportunities in your raw materials procurement. We work with you to select a group of participants from the Procurement, Finance, Sales and Development departments in order to address all of the relevant issues. Within a day, we will show you initial areas of potential and identify possible areas for improvement, setting specific tasks based on best practice examples. The raw materials workshop also reinforces knowledge and ensures comprehension of methods, and serves as a basis for your raw materials procurement to respond to new situations quickly and appropriately.

 

The results:

  • Lower costs for raw materials procurement
  • New supplier contracts mean minimised raw materials risks (supply, price, etc.)
  • Establishing tools and knowledge to ensure sustainable and stable raw materials management and the ability to react quickly to market developments

 

 

Do you want to lower raw material procurement costs, set up your raw material management in a future-proof manner and thus generate a clear competitive advantage?

Lars-Peter Häfele (lars-peter.haefele@inverto.com) is at your disposal for any questions regarding raw materials management.

Projects

mymuesli GmbH: Increasing company value by optimising procurement processes

Provider of specialist chemicals teamed up with INVERTO to identify unexploited potential

Leading packaging manufacturer optimised raw materials management through fixed price components



Current releases of the category Raw materials management

Results of the INVERTO Raw Materials Study 2018: receive the e-book including recommended actions.

Raw material prices

Business performance is being put under pressure by rising raw material prices. Read now our raw material study.

What our clients say about us


Thomas Pfeiffer, Head of Product Development at willhaben.at

„Together with INVERTO, we have achieved a result that we did not think possible at the beginning of the project. The overall package of tender preparation, service provider workshops and rounds of negotiations at top management level has raised our hosting landscape to a new level of price performance. I thoroughly recommend working with INVERTO.“

Dr. Jürgen Wickl, Managing Director of Styria Media IT

„By preparing a functional specification, we managed to advertise requirements in a tailored way. INVERTO’s orientation towards precise customer requirements and benchmarks as well as professional negotiations has contributed significantly to the success of this project. The close involvement of employees in this structured tender process is an additional bonus, and something which will benefit us in years to come.“

Siniša Mitrović, mag.oec., Managing director, Styria Tiskara Zagreb

„Due to the flexibility of the team, we managed to receive additional offers from suppliers and hence increase competition between existing suppliers. Through centralization of our former pick-up locations in Croatia and Bosnia-Herzegovina we managed to reduce the operational work for our employees. Furthermore, this centralization led to a huge additional revenue from our waste paper business. The project work with INVERTO was very professional and made this great result possible.“

Marc Lamure, Director, Montagu Private Equity Associates LLP

„INVERTO has helped D.O.R.C. with the professionalization of the procurement organization and accompanied the supplier negotiations for various products and services. By implementing new processes and working with procurement staff, the achieved savings enhance sustainability and will result in a more profitable organization.“

Erwan Quemener, Purchasing Director, Chassis Brakes International

„INVERTO helped us in raising undreamed-of sources of savings in both direct material and indirect material areas. They did not only identify these potentials but they supported us in the implementation phase with a great professionalism.“

Nick Gerrard, CFO, MID Essex Hospital Services NHS Trust

„INVERTO’s market and product knowledge have been invaluable in helping the Trust deliver substantial cost savings in a short space of time. They have the ability to talk the clinicians language, optimise the procurement process and deliver a result the trust could not have achieved itself.“

Bart Stubbe, Vice President of Purchasing LINPAC Group

„INVERTO are assisting LINPAC since early 2008 in transitioning from a decentralised to a category purchasing structure, bringing sourcing expertise, skilled resources, technology and methodology to recognise, create and release value to the company.“


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