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Situation

Our client had never used eSourcing before, so they were very keen to make savings on this first project. They had been working with the same supplier for Point-of-Sale (POS) Prints for years, but wanted to put the contract out to a competitive tender process to get a better understanding of market prices and suppliers capabilities. Their spend was about €1,000,000 a year and prints were delivered to retail sites across the United Kingdom once or twice a month. To our client, the quality of the printed material was key as it was handed out to customers to promote their products. The business was reluctant to switch supplier, and not at all ready to consider suppliers they didn't already know. Only the incumbent + 5 other suppliers could be included in the tender process.

Solution

  • An initial RFI was conducted with the 6 suppliers to get a better understanding of supplier capabilities and their interest in the business
  • 3 suppliers - including the incumbent - were shortlisted and invited to meet the stakeholders face-to-face
  • The 3 suppliers were asked to bring product samples for the meeting allowing all stakeholders to see and feel the quality of the prints
  • The 3 remaining suppliers were invited to an RFQ with a clear message that there would not be any further rounds of price negotiations and that the supplier with lowest price would be awarded the business

Result

  • The two-step process - initial RFI and then RFQ - proved successful as it quickly pointed out the 3 most interesting suppliers
  • The incumbent supplier reduced his prices with approximately 30%
  • One supplier quoted more than 50% lower than current prices
  • After just a few months all stakeholders agreed on that the new service was actually better than the previous one
  • £520,558 savings identified -52.89%