The Challenge

Procure4 helped the £4.5bn turnover company, Compass Group develop an international procurement strategy. It required de-coupled logistics solutions in each of its markets to enable leverage with both Group and optimal regional deals with its huge supplier list.

In the UAE there were no established, independent logistics providers capable of delivering such a solution, as a result, Compass faced serious issues that were eroding its competitive advantage and profitability.

The Approach

Procure4 were tasked with delivering the following activities in an attempt to fund the project:

• Utilise Compass Group’s global solutions
• Direct commercial terms with local and regional suppliers
• Significantly reduce the ‘Approved Vendor and Product’ lists
• 99% reduction on case fill orders through the new hub, whilst reducing stock
• Enhance cash through revision to payment terms and stock holding

Procure4 quickly added capacity and international breadth to the existing Compass team and approached the challenge.

The main issue lay in the fact many agents and local suppliers were unable to offer any logistical efficiency savings as they were still servicing other customers, so Procure4 facilitated a Compass UAE review and agreed upon ‘must stock’ and ‘must promote’ products. This allowed for more robust negotiations and de-listings to take place. A number of new suppliers and alternative products were introduced which replaced or enabled leverage against traditional solutions.

The Results

Procure4 were able to deliver 5 key work streams and achieve significant cost savings in 9 months this enabled the new logistics hub to get up and running efficiently. The outcomes were independently audited by Deloitte.