Delivering sustainable savings at Grupo VIPS
- Case study
Efficio helped Grupo VIPS to drive a Strategic Sourcing programme across its direct and indirect spend, achieving 10% annualised savings within six months.
This lead to improved cross-functional collaboration, and upskilling and involvement of all relevant Procurement personnel, ensuring that the existing team has the capability to continue delivering benefits into the future.
Grupo VIPS is a leader in the restaurant and retail industries in Spain with an annual turnover of €500m. The group consists of 375 restaurants, as well as a joint venture with Starbucks Coffee International for all Spanish, Portuguese and French Starbucks establishments. Grupo VIPS recently restructured its Procurement department to separate the restaurant business from the retail business and was looking for an independent advisor to identify and deliver savings opportunities in their external spend.
Efficio was engaged and tasked with achieving between 4-7% of annualised savings from the spend on Food, and to ensure the long term sustainability of these benefits. There was an additional requirement to improve the overall performance and visibility of the Procurement function through process changes, introduction of new tools and personnel training.
Using our deep market expertise and knowledge, Efficio helped the Grupo VIPS team to successfully:
- Introduce seven cross-functional Strategic Sourcing teams comprising Procurement, R&D, and Quality & Innovation
- Source a broad range of food categories, redesign the product development process to enable earlier involvement of Procurement, and unbundle inbound logistics from supply contracts across Europe
- Collaborate with Product Development to identify and implement a range of food specification improvements, as well as ingredient harmonisation across menus of different VIPS sub-brands
- Request quotations from potential suppliers for current specifications as well as more cost-effective suggested alternatives
- Introduce a price review process to vendors for commodity based products and execute long-term indexed agreements
- Introduce Tier 2 agreements with price visibility down to ingredient level
- Negotiate frame agreements with incumbent suppliers of food products to leverage Grupo VIPS’ entire spend
- Redefine the supply chain to source directly from fresh produce suppliers to manage overall spend and price variations
- Introduce new automated tools to efficiently run periodic food tenders
- Collaborate with the Quality department to allow for the specifications of the top 350 stock keeping units to be proactively managed via a central database
- Redesign the Product Development process to allow for earlier involvement of Procurement
With the savings already achieved and the capabilities of our teams greatly enhanced, we are now involved to a much greater extent throughout the development process and take a much more proactive role in ensuring both the quality and consistency of the products we offer.
Efficio’s engagement helped deliver a number of significant benefits for the client, including:
- Delivered 10% of annualised savings across Food and Beverage spend
- Implemented the majority of new Food contracts within six months of project launch
- Ensured cash neutrality within a few months after the project’s conclusion
- Achieved wider visibility of Procurement within the organisation
- Upskilled the Procurement team through full involvement in the structured process
- Greater cross-functional collaboration, paving the way for a more value-added role for Procurement in the future