New processes, competitive tendering and monitoring: the recipe to save money

The collaboration between Expense Reduction Analysts and Puustelli Group went on for a long time, covering a wide range of cost categories, with significant results achieved in nearly all of them. Categories reviewed comprised freight, facility management, factory consumables and packaging supplies. For each cost category specific expertise was required with regards to suppliers of products and services, as for insight and understanding of the operating processes.

“The Expense Reduction Analysts experts have provided us with invaluable new perspectives on our processes, and this eventually was the area where we achieved the greatest savings. For example, we cut freight costs significantly by reorganising our management of small consignments. It took the critical eye of an external expert to notice what could be achieved by implementing new practices, and I would like to give specific praise to the Expense Reduction Analysts experts for this,” says Puustelli Factory Manager Tarmo Vesimäki.

The Puustelli project began with a review of each cost category, and Expense Reduction Analysts experts making a detailed investigation of current overheads, processes and supplier agreements. This provided a reliable basis for competitive tendering in each category.

The benefits of good competitive tendering

“The first starting point for successful competitive tendering is to have a clear idea of what you need. This is often taken too lightly, and as a result suppliers receive imprecise calls for tenders that lead them to include a margin of uncertainty in their prices, or even to offer a package that entirely fails to address the customer’s needs,” explains Heikki Valtonen, Expense Reduction Analysts’ expert in charge of the Puustelli account.

“We noticed that suppliers appreciated the fact that the competitive tendering was prepared  by an expert in the field, as the responses received to the call for tenders were better than usual and indicated a serious intention to compete. These carefully prepared bids have made our choice easier, and the entire competitive tendering process was also managed in an exemplary manner,” says Vesimäki.

However cost management is not merely a matter of one-off cost cutting. Savings crucially depend on monitoring operations in the long term. The follow-up period, in which experts monitor cost changes and report the results to Puustelli, is an essential part of the Expense Reduction Analysts approach.

“Monitoring such a wide and varied range of cost categories in this way would be far too much work for us alone, and I consider it a highly important part of our collaboration with Expense Reduction Analysts. On the whole, I feel that everything went very well, and we have made substantial savings even in cost categories where we would never have expected them. This exercise has made us more competitive by pruning unnecessary costs and enhancing the quality of our operations,” Vesimäki explains.

DOWNLOAD THE CASE STUDY HERE (PDF)

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