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Redefining Cost Strategy

A leading international DIY retailer partnered with WTP to transform its purchasing organization toward fact-based negotiations. By implementing a Center of Excellence approach and testing 20 cost models in live supplier negotiations, the company achieved over €300,000 in savings. The success of the pilot led to board approval, investment in a dedicated analyst team, and plans to scale the approach across the organization with a target of €2 million+ in savings.

Introduction
Our client, a leading international retailer in DIY, has long aspired to base their negotiations on facts. However, achieving this goal remained elusive. Recognizing our expertise, they
engaged us to refine, challenge, and bolster their Purchasing strategy and analyst team.

Approach with WTP

  1. Initial Engagement
    We began by delving into the core ambitions of the retailer, laying out our proven WTP approach.

  2. Strategy Refinement
    Through our guidance, we aided in the creation and deployment of a new Center of Excellence team approach. Considering the vastness of the organization, we navigated three tiers of approvals.

  3. Test Phase
    A week was dedicated to crafting 20 cost models, which were then field-tested by 7 purchasing managers in real-time supplier interactions. This newly acquired knowledge paved the way for informed renegotiations, realizing savings surpassing 300,000 euros and endorsing the WTP approach.

Concrete Results
The company's board endorsed the new approach of "fact based working".

They invested in forming a dedicated Purchasing Strategy & Analyst team. Opting to begin on a modest scale, they aimed to develop 125 cost models to assist seven purchasing managers with the 2024 agreements. Their goal is to achieve savings of over €2,000,000 and ensure improved cost discipline with suppliers.

Plans are underway to extend this support to all 50 category managers the following year. There's also a keen interest in expanding this approach to indirect procurement, ensuring company-wide cost efficiency.

Do you have a use case involving WTP?
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