Challenge

Our customer had had a greater focus on costs for purchase of direct material than for indirect material. The assessment was that there were major potential savings in the latter cost base. With this type of problem, it is important to start with a facts-based analysis. At the same time, consideration must be taken to the organisation’s specific conditions.

Solution

Level21´s team analysed and structured the material costs, and also identified areas with the greatest effect on the total cost base. A cross-functional team was put together consisting of staff from the customer led by Level21. Objectives were formulated by product group. Primary causes were analysed and cost drivers were identified. Negotiations were conducted with suppliers identified. Fulfilment of objectives was followed up and ensured. Improvement activities within internal material supply were performed simultaneously with the analysis work.

Results

The outcome was a substantial reduction in material costs and a more efficient supply chain. Through working closely together with the organisation, the organisation’s own expertise and capacity were also developed.
This created sustainable results.


Would you like help to create sustainable results? Contact Beatrice Björk via e-mail or on +46 70 373 17 91.