The Challenge

Pizza Hut Delivery (PHD) are one of the UK’s leading fast food delivery brands operating a chain of 380 delivery outlets (known as Huts).  The Huts are largely run by franchisees and it is an expanding business.

PHD wanted to get more value from their marketing budget particularly in the areas of print and point of sale (POS). Value here was not just reduced cost but also access to innovation which would increase sales.

PHD have an in-house procurement team but only one member of this team worked on indirect procurement and she did not have experience of marketing so could not help.

PHD engaged Procure4 to provide the expertise in marketing to help it achieve its goals. 

The Approach

Procure 4 engaged with PHD’s marketing team, its print & POS creative agency and existing suppliers. This enabled Procure 4 to quickly understand the existing ways of working, costs and what exposure PHD were getting to innovation.  

By quickly developing a good working relationship with the marketing team, understanding the current levels of service and benchmarking against Procure 4’s industry knowledge the approach was agreed. This was to: 

•      Competitively tender both the print and POS
•      Through the tender process have the suppliers demonstrate the  innovation they could offer
•      Have the suppliers show how they could work with the incumbent creative agency
•      Put service level agreements in place (as none existed) 

A total of eight print suppliers were invited to respond to a detailed ITT with seven responses received.

Procure4 then ran two E-Auctions one for print and the second for POS.

Following this five suppliers were short-listed for the next stage, three for print and two for POS. 

With PHD’s full involvement, each of the five printers took part in final presentations on their production sites followed by commercial negotiations which resulted in the submission of ‘Best and Final Offers’. 

PHD then selected two providers (one for print and one for POS) which they appointed.

The Results

As a result of this process savings of over 20% were delivered on PHD’s Print & POS spend.

Both suppliers also committed to run trials of new innovative formats at no additional cost (normally these would cost between 5%-15% extra).  The formats are designed to increase sales and improve the ROI on the print.

The suppliers have both agreed Service level agreements which have been put in place and are being reported against.
 
The suppliers throughout the process demonstrated their ability to meet all PHD’s operational needs, quality standards, flexibility while still delivering innovation.