Fine Tune Success Story: Supplier Agreement Consolidation
At Fine Tune, we take great pride in delivering successful outcomes for our clients.
We look forward to sharing these quick "120 second read stories" so that you can learn how your peers in Procurement and Operations are solving complex supplier challenges.
Enjoy and let us know what you think.
A client recently purchased a new location which, it turned out, was obligated to two different uniform supplier agreements.
One of the suppliers (“Supplier A”) had a national agreement with the client which covered many other locations. This broader relationship made dealing with Supplier A relatively easy.
However, the other supplier (“Supplier B”) presented a few challenges.
Previous ownership had signed three separate agreements with Supplier B, all with over three years remaining and staggered contract expiration dates. This was inconvenient, to say the least. To make matters worse, the rates and terms in these agreements were extremely unfavorable.
Our strategy was to combine the three Supplier B agreements into one agreement, inject more favorable language, and drive the pricing down to the greatest extent possible.
Our client wanted all of this done in a hurry, but of course, this is easier said than done…and it required the cooperation of Supplier B.
Using our extensive industry expertise and relationships, we were able to immediately arrange a call with Supplier B’s local General Manager, whom we had amicably dealt with in the past. It wasn’t easy, but he ultimately agreed to our requests.
A new agreement was struck with vastly improved rates and terms. Overpriced and unnecessary items were removed. In the end, a 20%+ savings was implemented in a scenario where the outlook for the next three years was bleak. Our client could not have been more pleased.