Benchmarking Cost and Identifying Cost Optimisation Opportunities for a Global Commodities Player for its Refined Edible Oil Brand in India

Routes-To-Market Strategy

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
  • 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.

Leave a Reply

Your email address will not be published. Required fields are marked *