Client Challenge
The client was a manufacturer and retailer of a refined edible oil brand in Rajasthan and Western UP. The company’s top management wanted to evaluate cost-saving opportunities in areas of processing, packaging, and selling and distribution. Thus it requested UC Strategy to assist in the following key areas:
- Analysing the existing cost structure
- Benchmarking its cost structure against that of key competitors
- Identifying opportunities for cost optimization
Our Approach
To benchmark costs and identify cost optimization opportunities for the client, UC Strategy adopted the following approach in the three key areas:
- In the packaging sector:
- Evaluated opportunities for items (corrugated box, HDPE jars, PET bottles, tin boxes etc.) contributing 98% of consumption value
- Buy vs. make decision
- Change in design to optimise weight and dimension
- Alternate sourcing options
- Alternate packaging material
- Reduce rework/ packaging
- Introduced new vendors in the market to the client for better sourcing opportunity
- Recommended changes in the packaging material procurement process and the packaging quality check process
- Evaluated opportunities for items (corrugated box, HDPE jars, PET bottles, tin boxes etc.) contributing 98% of consumption value
- In the manufacturing sector:
- Benchmarked consumption of resources (steam, power, major chemicals) with similar profile and capacity competitors in the market
- Analysed options for alternate grade inputs – bio coal, imported coal, alternate vendors for key chemicals etc.
- In the logistics sector:
- Evaluated options like alternate mode of transport, own vs. buy transport arrangement for both inbound and outbound transportation
- Analysed the need for external warehousing and recommended the optimum usage of own warehouse
Our Impact
The client received initiatives, which resulted in an annual savings of almost Rs. 2 crores and an action plan for the client to implement.