Post Danmark Procurement gains amount in the double-digit million range in three months At the moment, we are facing major macro-economic changes and extreme fluctuations in the raw material prices, leading to a so-called “window of opportunity” from which Post Danmark, assisted by Valcon, has benefited. Price improvements in the double-digit million range each year are the results of a three months effort including fact-based renegotiations. “After four weeks, we had completed well-prepared renegotiations with 20 major suppliers and secured cost savings in the millions,” says Carsten Christiansen, head of Service centre, who is in charge of Post Danmark’s central procurement department with 25 employees. Focus on costs The basis for the project is the financial crisis affecting Post Danmark as well as most privately owned businesses in Denmark. The financial crisis challenges earnings, leading to a naturally increased focus on costs. “Typically, procurement accounts for 50% or more of the cost base of a business. In a situation where cash flow and costs are in focus, it is therefore very natural to take a closer look at the possibilities of achieving savings on procurement. Add to this, major fluctuations in raw material prices on the world market, and there is good reason in examining the possibilities of reducing the purchasing prices of your business to the new market level,” says Stig Jessen, director of Valcon’s purchasing area. “Post Danmark focuses a lot on our possibilities of reducing our costs wisely in order to strengthen our value creation and improve our competitiveness in the long term,” says Carsten Christiansen. Fair share of the price gain The price of oil, steel, plastic, transport and various metals, and many other types of goods is decreasing at the moment. This is highly favourable for some of Post Danmark’s suppliers. Therefore, the strategic procurement challenge facing Post Danmark is: How can Post Danmark skilfully and in a sustainable way get a fair share of this gain? FActs on Post DAnmArk Each day, Post Danmark’s about 22,000 employees collect and sort about 11 million letters and packages for distribution among 5.2 million customers in 2.6 million households. About 95% of the domestic letters are distributed on the following weekday if handed in on time. Continual quality control checks ensure that postal areas and postal centres are always up to the promised quality level. Post Danmark cooperates with trade and industry through the following services: • • • • • • Letters Direct mail Unsolicited mail Commercial packages Light goods Facility Services Post Danmark’s customers cover the entire spectrum of Danish businesses from the largest groups to small, recently established entrepreneurs. 3
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