CASE STUDY
STRATEGIC SUPPLIER MANAGEMENT
Obtaining significant price cuts from a quasimonopolistic supplier
CASE STUDY
CONTEXT AND CHALLENGES
A
European industrial group in the health sector was buying medical devices from an
American group that occupied a hegemonic position, both in terms of its market presence and its
product innovations.
Our client needed to obtain 10% savings to retain business, in a market where supplier rebates
were falling, focusing on strategic suppliers.
APPROACH AND METHODOLOGY
We implemented a dedicated, multi­business­line task force to develop the negotiation action plan with
this strategic supplier. This extended team included Purchasing, Operations, Marketing, Sales and
Finance. The team selected the levers that would enable it to once again achieve a power balance in
its relationship with this supplier (e.g. non¬quality cost, technological alternative, market awareness,
etc.). Each lever was based on jointly compiled statistical analyses. At the same time, the team came
up with potential synergies, which could be suggested to the supplier (ideas to develop the business
together, joint innovation, industrial and logistics synergies, etc.)
The various functions were briefed regarding the messages to communicate to the supplier, to ensure
consistency and credibility.
RESULTS
− More than 12% savings obtained, i.e. more than the last five years combined
− A more balanced relationship has been established, which has become healthier, on equal footing
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