Consulting Project: Procurement cost reduction at Fressnapf Tiernahrungs GmbH
You snooze, you lose
Undisputed market leader for pet supplies throughout Europe
Torsten Toeller opened the first Fressnapf market in Erkelenz (a town in Germany’s northern Rhineland) more than 20 years ago. Much has happened since then. Following an unprecedented and remarkable success story, Fressnapf is now the undisputed market leader for pet supplies throughout Europe. The company employs around 8,000 staff and achieved a record turnover of 1.3 billion euros last year in an environment that is subject to ever fiercer international competition. Online business in particular has shaken up the market.
Is there a recipe for this success story? “Not really,” says Martin Luntscher, CFO of the Fressnapf Group. “We give our customers exactly what they want and win them over with our products. Top priority always goes to product quality and customer service,” he adds. It goes without saying, though, that everything needs to be operating smoothly behind the scenes. “That’s why we are constantly scrutinising the company’s operations and trying to improve our processes,” Luntscher continues.
Joint project with INVERTO to reduce indirect procurement costs and review internal procurement processes
Marcus Schwarz and Verena Örenbas, who are responsible for the INVERTO project at Fressnapf, are well aware that these are not simply empty words. “In addition to the joint project to reduce indirect procurement costs and review internal procurement processes, Fressnapf last year initiated a number of in-house projects, including implementation of a new ERP system. Clients are rarely so successful, open and quick in implementing projects. It’s extremely impressive, all the more since all the projects are extremely challenging and, as a franchise company, Fressnapf requires very intensive co-ordination phases,” they explain.
There are a number of reasons why projects with external consultants are so successful at Fressnapf. In addition to selecting consultants with the necessary experience and expertise, Fressnapf considers it important to be able to integrate the consulting team into the organisation and to enable staff to have a say in the change process.
Cost reduction and high quality of new suppliers in the long term
As Luntscher explains, “Changes only stick if everyone involved helps to make the important decisions. One aim of our current procurement project was naturally to reduce procurement costs, but we also made a point of exploring possible new strategies from all angles and examining the feasibility of the proposals put forward.” This applies above all to the co-operation with suppliers, service providers and agencies. The following questions are particularly important for the team made up of Fressnapf staff and INVERTO consultants: Is the quality of new suppliers also satisfactory in the long term? How easy is it to get in touch with suppliers, how reliable are their products and how can existing supplier relations be improved? Are the proposals put forward and the new processes appropriate for Fressnapf? These questions are particularly important when sourcing creative agencies, IT requirements, insurance, equipment for living animals and marketing distributors, as creativity is essential in these areas and suppliers need to satisfy the highest quality requirements.
An international company such as Fressnapf operates in a global market. “Even with indirect requirements such as shop fittings, this approach is now essential for a company that faces international competition. The solution is often pretty obvious. It’s simply a case of weighing up the pros and cons to find the right path for the company. Our staff and consultants complete the necessary steps in joint teams and that works wonderfully well,” says Luntscher.