Procurement Optimization at Styria Tiskara Zagreb
Cost savings through improved Supplier and Waste Disposal Management
Tiskara Zagreb, which was founded in 2002 is one of the leading Croatian factories for newspaper printing. With a maximum printing capacity of approximately 75,000 newspapers per hour, the two machines at Tiskara Zagreb offer the most modern printing infrastructure within Croatia. The focus on quality is enhanced through the ISO 9001 certification, which is also unique in Croatia’s newspaper printing industry. Besides the daily newspapers Večernji list, 24sata and Poslovni dnevnik, the printing house produces various regional newspapers issued on a weekly or monthly basis.
Initial Situation / Challenges
Styria Tiskara Zagreb was facing difficulties and risks with its current supplier, mainly in terms of reliability and costs. When INVERTO was asked to support the company’s supplier management and increase efficiency in waste paper disposal, multiple Styria business lines had to be integrated. This also meant, that different requirements had to be coordinated and harmonized.
As supplier negotiations had already started and a supplier contract proposal was present, INVERTO’s project involvement and results were to be realized on a short-term basis. Further challenges that the project team was facing were the geographical distance between the mother company in Austria and Tiskara in Croatia, in combination with language barriers.
INVERTO’s project targets were defined as following:
- Harmonization of supplier pool for Styria in Croatia and setup of a standardized contract for all Styria branches
- Maximization of offered prices and long-term securing of those prices through indexation to the EUWID
- Increase of revenue through waste paper disposal from the company-owned printing factory
Project Approach Waste Paper Disposal
In order to increase the efficiency of waste paper disposal, INVERTO initiated the following steps. Firstly, the waste paper quantities of the various Styria business lines were bundled so that they could be placed on the market for an offer preparation. Furthermore, the pick-up locations of “remittenders” (unsold newspapers from kiosks) were centralized in the course of negotiations with the distribution company.
Secondly, on-site plant visits and multiple negotiation rounds were held with promising suppliers. As a result, long-term contracts were put in place to secure the negotiated prices and indexation to the EUWID for waste papers.
The main learnings for INVERTO in the course of the project were, that sometimes it is also necessary to think out-of-the-box and to use a creative approach in order to identify savings potentials. Furthermore, it became apparent again how important an upfront strategic preparation is to optimize prices in supplier negotiations.
The project results show clear benefits for the company:
- Direct EBIT effective results in 2017
- Securing of payments due to co-operation with a new supplier (avoidance of current supplier due to non-payment risks)
- Implementation of a central supplier for Styria Croatia and reducing operational work for client’s employees
- An increase of revenues for waste papers up to market level
„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.”
Siniša Mitrović, mag.oec., Managing director