Total Savings for Five Year Term
The projected long term savings, based upon completed projects to date, are
$88,000.
While work was being conducted, the Above the Standard team met (via teleconference)
with the PM for updates or specifications as needed and we were able to
provide samples for inspection as requested. Throughout this process Above the
Standard developed a trusted long term client partner relationship. We will continue
this relationship and we have become a valuable resource for them to turn
to for future procurement projects.
Upon completion of the initial project, Above the Standard conducted quarterly
savings audits and invoiced client on actual savings. We continue to maintain
a relationship with the client and will be readily available for projects on an ‘as
needed’ basis.
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33.1.032 Manufacturer Case Study 2
1. ®
Experts in Profit Maximization & Business Growth Services
Case Study -
Manufacturer Cost Reduction
Food & Cosmetic Oil - Refining & Blending
Above the Standard Procurement Group, Inc.®, www.ATSPG.com
2. 2
Case Study - Food & Cosmetic Oil Refining &
Blending
May 20, 2014
2
www.ATSPG.com
Case Study: Manufacturer Cost Reduction
Food and Cosmetic Oil Refining and Blending
Client Background
This Above the Standard Procurement Group®, Inc. (Above the Standard) client is
one of the world’s leading manufacturers of high value-added specialty vegetable
fats with special focus on the food ingredient and confectionery industries. These
fats are used as butterfat and cocoa butter substitutes as well as transfer solutions
for fillings for chocolate and confectionery product. The fats are also used in the
cosmetics industry. The company has multiple facilities across North and South
America and Europe.
When Above the Standard first met with the CFO at this organization, he recog-
nized the value we would be able to provide to his organization. The procurement
resources available within this company were minimal, especially in relation to
the size of the business and the vast array of items purchased. The CFO suggested
there may be opportunities to improve the sourcing of general overhead items as
well as direct materials and we were directed to work with the Purchasing Man-
ager (PM).
Once the NDA was in place, the PM provided us with a comprehensive chart of
accounts to analyze. Based on our experience we were able to identify several
opportunities to improve spend category management and reduce costs. These
opportunities were reviewed with the PM and we mutually agreed upon project
prioritization, agreeing to six initial projects.
For the agreed upon projects, Above the Standard provided an analysis of the cat-
egory and sourcing options. In each case the client benefited from reduced costs,
identification of back up suppliers, validation of current pricing and/or market
intelligence. The only compensation Above the Standard received was for those
projects resulting in cost savings.
3. 3
Case Study - Food & Cosmetic Oil Refining &
Blending
May 20, 2014
Account Summary
Beginning May, 2013, Above the Standard partnered with Purchasing and conducted sourcing projects for
various spend categories:
„„ Provided sourcing expertise across categories – especially in manufacturing.
„„ In the spirit of partnership, provided value even for categories for which Above the Standard will not be
compensated.
„„ Provided all work at risk and is only compensated upon performance.
Spend Category Summary % Savings
ProjectedAnnual
Savings
Steel Drums
Provided creative options for a commodity-like item (refurbished and reusable totes; alter-
nate release options) resulting in 10-72% savings
Provided vetted back up suppliers
15% $14,000
General MRO Initial assessment identified opportunities for additional value TBD
Teleconference Services
Provider various options (annual contract or per minute)
Identified options to achieve cost savings of 33-87%
(ATS ceased activity after learning client sourced category internally from Headquarters)
33-87% N/A
Motors
Provided back up suppliers
Leveraged Above the Standard relationship to achieve cost reduction with incumbent sup-
plier
15% $3,600
Valves
Provided category analysis
Identified back up suppliers
Validated current sourcing approach
0% N/A
Filters
Provided specialty supplier to address specific client need around bag failure helping to
resolve a chronic problem (Veteran-owned small business)
TBD
4. 4
Case Study - Food & Cosmetic Oil Refining &
Blending
May 20, 2014
4
www.ATSPG.com
Additional Opportunities:
„„ Telephone (land line)
„„ Bulk chemicals
„„ Food additives
„„ Office supplies
„„ Energy
„„ General MRO
„„ Mechanical seals
„„ Warehouse supplies
„„ Expansion of ATS services to other US sites
„„ Consulting Services related to: ISO, Lean, Six Sigma, S-Ox, Process Capability
Assessment, and Procurement and Materials Control
Conclusion
While work was being conducted, the Above the Standard team met (via telecon-
ference) with the PM for updates or specifications as needed and we were able to
provide samples for inspection as requested. Throughout this process Above the
Standard developed a trusted long term client partner relationship. We will con-
tinue this relationship and we have become a valuable resource for them to turn
to for future procurement projects.
Upon completion of the initial project, Above the Standard conducted quarterly
savings audits and invoiced client on actual savings. We continue to maintain
a relationship with the client and will be readily available for projects on an ‘as
needed’ basis.
Total Savings for Five Year Term
The projected long term savings, based upon completed projects to date, are
$88,000.