Securing Savings by Developing Operating Processes

Faba, a company with nationwide operations, wanted to find cost savings. Expense Reduction Analysts’ experts found ways to make savings and, in order to secure these savings, developed with Faba a new operating model for Faba’s office and work supplies distribution system.

Faba, a Finnish cattle-breeding specialist owned by livestock owners, wanted to enhance its operations, particularly in the acquisition, storage and distribution of various office and other work supplies. In the past, Faba’s delivery vehicles also handled, in addition to their usual work, the distribution of these supplies to more than 350 operating locations around Finland.

“We conducted a detailed analysis of the costs of ordinary office supplies, IT equipment, telephones, work footwear and other similar items, as well as Faba’s internal operating model for distributing them. We came to the conclusion that Faba should centralise the distribution of these supplies with a specialist partner, in this case an office supplies chain,” explains Expense Reduction Analysts’ specialist Kai Flang, who was in charge of the project.

The selected wholesale partner already had its own efficient national storage and distribution organisation, so it was not worthwhile for Faba to arrange this on its own for a non-strategic business function. In turn, the office supplies wholesaler was able to expand its own operations by including the special supplies needed by Faba in its own storage and distribution.

“In addition to outsourcing a non-strategic function and saving costs, we enhanced our operations, as in future our own delivery vehicles will focus only on their core business. With the transfer of the storage and collection of office supplies to the wholesaler, we also freed up time for our most important work. We are very satisfied with the partner found by Expense Reduction Analysts and with the operating model they developed with us,” says Faba’s Breeding Director, Pirkko Taurén.

Savings secured by developing operating models

In cost management, a very big role is often played by developing operating models, and this often generates just as significant savings as the competitive tendering of ordinary purchases.

“In Faba’s case, cost savings were secured not only by the new partner and follow-up monitoring, but also by Faba’s genuine desire to enhance its operations and develop with us a more efficient operating model. In addition, we devised monitoring indicators with Faba,” says Flang.

“The new operating model has got off to an excellent start. Now distribution also works better for the office employees who order supplies. Previously, deliveries were made once or twice a month; now the supplies ordered arrive the following day,” says Taurén.

Expense Reduction Analysts’ project with Faba is now in the follow-up stage, in which the realisation of savings is monitored.

 

CATEGORYSAVINGS
Office and other work supplies       17%

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