Manufacturing & Engineering – Verallis

39% Savings in Energy

fngip — Tue, 07 Nov 2023 13:32:35 +0000

The Result

39%

Savings Rate

Total Annual Spend:

€404,895

Total Annual savings:

€157,926

In just a 7-month period Energy, related costs were significantly reduced by an average of 39%, increasing the Client’s profit margins rendering them more competitive.

The Challenge

1

The Client uses electricity to run the mineral water bottling processes in the two factories in the portfolio. Starting this year the Client was served as a Last Instance Supplier – FUI by one of the most important electricity suppliers in Romania, with a significant market share. This arrangement occurred without a contract with the supplier, thus specifying a fixed energy price. The energy supply is in accordance with Emergency Ordinance 27 of 2022-03-18- consolidated form, Article 2 (1) and Government Decision 357/2022, whereby the selling price was capped at 1300 lei/MWh, VAT and regulated taxes included, for non-domestic consumers who are not provided for in letter a) – e). The primary challenge that VERALLIS team was faced with, in this project, was finding suppliers willing to agree in a one year contract with fixed energy price for the entirety of its duration. The reason behind this was rooted into the market conditions, under which both visibility & available quantities were limited for no longer than half-year terms. Furthermore, managing to secure a contractual price below the capped price of the existing supplier was a significant barrier to overcome.

The Method

2

VERALLIS initiated a tender process for the provision of Electric Energy services to more than 20 pre-qualified suppliers, including the current supplier of the Client. The commercial negotiations with the potential suppliers and the agreement on the terms and conditions of supply were carried out in order to cover the high-energy needs for both factories in Romania, for a one-year period. VERALLIS recommended that the Client entirely switch from their current Energy provider which lead to a reduction of their electricity expenses by € 92,000 for just a 7-month period, whilst maintaining the running conditions of the energy supply activity. This switch resulted in significantly reduced costs of 39%. Furthermore, the agreed contract price for active energy will be fixed and guaranteed for the entire duration of the contract. At the same time, our Expert Analysts – proactively – carried out negotiations with the current supplier in order to optimize the costs of the Client for Energy Procurement for the first semester of 2024.

12% Savings in Freight

fngip — Fri, 09 Jun 2023 06:23:17 +0000

The Result

12%

Savings Rate

Total Annual Spend:

€4,000,000

Total Annual Savings:

€480,000

The most important achievement of the project, in addition to reducing cost, is that these savings were achieved by 15% of the suppliers used recently by the client all of whom are now very satisfied with the new method and form of cooperation.

The Challenge

1

The project regards freight in both imports and exports. The range of the company freight includes almost all categories (Road Imports and Exports Full Track and Groupage, Sea Imports and Exports, Air Imports and Exports

The challenges of this project beyond the high expenses were:

The complexity of the project regarding the transport form & logistics load profiles
High volume and high cost of project monitoring
Very large number of existing suppliers
Great changes in Greek balance between imports and exports
Meeting the strict requirements on the quality of transport and other services by the suppliers
Most important demand is the high availability in very fast response

The Method

2

Despite all the difficulties and challenges of the project, the methodology followed and the emphasis that was placed on full analysis of transport as well as the strategy that the suppliers of this project should have, led to impressive results.

The analysis was based on the correct categorization of transport and the equally right export of the benchmark in each category. The strategy was based on the concept “Optimal availability of transport project and services in the lowest price”.

Production Management

fngip — Tue, 30 Aug 2022 12:33:58 +0000

The Result

The client implemented a production management system affecting all business aspects. It can forecast needs, calculate human resources, anticipate sales seasonality and accurately plan purchase of raw material. The implementation of which, translated into quantifiable data and delivered the following outcomes:

The planning horizon increased from one week to 3 months.
A 25% productivity increase was achieved, in a key department.
The combined efforts led to a headcount reduction within the organisation, of 3 within a year.

The Challenge

1

The Client had a complex production process, in place, with many finished goods, multiple semi-finished products and a large number of machines whose operators reallocated constantly. There had been no structured way to measure performance and capacity and no planning “tools” were used. All activity was determined on a day-to day basis. Moreover, we identified an absence of “tools” to access and combine sales needs (demand planning), define production capacity (production planning) and purchase of raw materials (material planning). In addition to the latter, one of its main departments OEE (Overall Equipment Effectiveness) was measured at a 62% (low) and there was indication of personnel overcapacity of over 30%.

The Method

2

To ensure an optimum production management system would be installed:

We used the Client’s routings and actual production data, going back multiple years to create a thorough mapping of its machine capacity loading. This highlighted the spare capacity in some machines and the marginal capacity in others
We created multiple planning tools in order to create a both long and short term production plan and the relevant raw material needs
We applied performance management methodology in its main machines, created the relevant KPIs and used on line measurement systems to assess productivity

20.55% Savings in Packaging

fngip — Wed, 23 Jun 2021 11:37:08 +0000

The Result

20.55%

Savings Rate

Total Annual Spend:

€63,453

Total Annual Savings:

€13,041

Savings were achieved with the current supplier and without changing current prices.

The Challenge

1

Packaging plays a key role in the Agricultural Industry.

Hence, agricultural products need advanced packaging solutions in terms of process and cost-effectiveness.

The Method

2

We evaluated the current procedures and operating costs and through detailed analysis, we presented solutions to the client in terms of both cost rationalization and process optimization. Our proposals were based on:

Implement suitable technical features
Improve process order
Optimize both client & supplier needs

19.98% Savings in Insurance

fngip — Wed, 23 Jun 2021 11:03:08 +0000

The Result

19.98%

Savings Rate

Total Annual Spend:

€78,000

Total Annual Savings:

€15,580

Thanks to its deep knowledge of insurance market, Verallis managed in short time to achieve 16% savings in group insurance with the most well-known and reliable companies, while improving benefits. In addition, 23% savings were achieved in other insurance categories (property, civil liability, transportations and cars).

The Challenge

1

The Client, always focused on the improvement of procedures and particularly sensitive to the optimization of operating cost issues, invited Verallis to further explore possible savings, which the Client had achieved in insurance. It is known that the “Insurance Market” is complex in terms of “Value for money Services”.

Incumbent brokers frequently employ marketing tactics that lead to missed opportunities. In this context, the Client had set in addition to quality standards and a minimum desired percentage of savings.

The Method

2

We evaluated the current services by scanning on-going contract agreements, taking into account all pre – agreed qualitative criteria compared to the current market price indices.

Our experts then explored more than one alternative value adding propositions that met all pre-set standards and provided a comprehensive review.

32.9% Savings in Courier

fngip — Wed, 23 Jun 2021 09:31:20 +0000

The Result

32.9%

Savings Rate

Total Annual Spend:

€450,000

Total Annual Savings:

€148,256

The level of service was improved in terms of both delivery time and Information Quality Management (IQM)

The Challenge

1

Courier is a very sensitive service and is distinguished from other services by feature such as speed, security, tracking, signature and swift delivery times.

The Client operates worldwide and the requirement for the suppliers was to provide courier services on very strictly timeline along with the best price

The Method

2

Our analysis revealed that the client should address the market for more competitive pricing and improved service.

Requests for proposals were sent to suppliers, with a detailed analysis of the company’s courier needs. Verallis analysed the offers based on the above criteria and proposed the best solution for the client.

The selection criteria to be met by the proposed solutions were determined jointly with the senior executives of the Client and included Values, Delivery time as a Key Performance Indicator, Price and Terms of payment