Overhead spending has mushroomed into cost savings

In La Rioja, the second most important harvest after that of grapes is the mushroom harvest.
Eurochamp was created in 2000 from the merger of Champiunion and Unichamp in order to meet the needs of the mushroom producers and to transform the raw material into tinned products, an activity taking place in two factories in La Rioja, in Autool and Ausejo as well as in the Iniesta (Cuenca) factory.
With a workforce of 300 employees, Eurochamp is developing an intense agricultural activity as well as being committed to innovating and developing their production and processing systems, and to the continuous updating and renewal of the product range.
 
In the first phase of the Eurochamp project, Expense Reduction Analysts conducted a comprehensive review of all overheads to define, together with the client, which cost categories had the greatest potential for improvement. Eurochamp was initiating a process of strategic change whilst simultaneously carefully controlling their overhead expenses; but at that time, there were no adequate resources available.
 
“We were busy with some strategic changes that prevented us to focus on the costs, which is why we needed some external help from experts such as Expense Reduction Analysts”, said Mariano Sanchez, General Manager at Eurochamp.
 
After some preliminary investigations, efforts were focused on optimising the cost categories of rental pallets, transport and insurance policies. Within the rental pallets, by studying levels of rotation for equipment and storage volumes, cost optimisation was achieved in line with the client’s needs. In addition, the invoicing method was clarified and the work process simplified, resulting in a more transparent rapport with the supplier.
 
For the insurance cost category, the analysis focused on reviewing the genuine needs of the customer and adjusting the cover consequently. Also, the multi-risk and personal liability insurance were optimised by combining policies and improving covers
Following the intervention by Expense Reduction Analysts consultants, and the use of the methodology of analysis and cost optimisation, it was possible to reduce spending by 14 to 25% in the cost categories investigated.
 
“The client has been very open to change and this has eased the modification in certain policies that have improved business relationships with suppliers” say the Expense Reduction Analysis consultants.
 
Recently, Eurochamp has started a strategic alliance with Riberebro Group, specialist in vegetable transformation to be able to compete on the European and international markets.  The union has resulted in the largest Spanish and second largest European group specialised in mushrooms.
 
“In an environment of strategic changes for the client, our work could be affected at different levels, but the whole team had the motivation to work hard and achieve the best results” says David Alcala, Project Director.
 
Expense Reduction Analysts consultants have managed to adapt to the process on-going at the time at Eurochamp, and to the peculiarities caused by this process, in order to understand the changing needs of the client and to assist them in taking decisions regarding spending policies at every step of the project.
Actually, the transport cost category was affected by structural changes going on at Eurochamp. Alternatives were offered that could improve costs by over 21% with suppliers specialised in the food industry and applying a comprehensive analysis of national groupage flows; ultimately they were not implemented as the responsibility for this category lay with another company.
 
The collaboration with the Eurochamp management was very good throughout the project, with relevant staff cooperating extensively with Expense Reduction Analysts consultants. Undoubtedly, much of the success of the project was due to the good relationship. Thanks to the intervention of Expense Reduction Analysts, Eurochamp has not only reduced significantly their overhead costs but also achieved additional benefits such as a better relevance of suppliers, products and services more relevant to the actual needs of the company. Therefore, Eurochamp is better equipped to successfully meet the challenges that await them.
 

“The consultants’ experience and the methodology used have proved a very effective combination, with a competitive and professional work in a moment of change well understood by them."

Mariano Sanchez, General Manager at Eurochamp

 

CATEGORYSAVINGS
Pallet rental25,2%
Transport21,6%
Insurance13,9%
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