POST DANMARK HOW QUICK ACTION AND FACT-FINDING CAN TURN INTO LARGE SAVINGS ON PROCUREMENT THE CHALLENGE How do you make sure you get your share when your suppliers suddenly benefit from great savings? The 2008 credit crunch trailed major macroeconomic changes in its wake, including extreme fluctuations in raw material prices. This created a window of opportunity that Post Danmark quickly decided to take advantage of with Valcon’s aid. For there were certainly savings to be had: Many of Post Danmark’s suppliers benefited from lower prices on oil, steel, plastics, transport, and a range of metals. The challenge, then, was this: How could Post Danmark secure a fair share of this windfall? The objective was to cut costs rapidly and in an intelligent, sustainable manner – for this move also had to improve competitiveness in the long term. THE SOLUTION Valcon’s solution was to get the facts straight first – and to act fast. After two weeks of careful analyses, the first wave of fact-based renegotiations was launched, leading to talks with 20 major suppliers. The second wave followed soon afterwards and extended to more than 120 other suppliers. The entire process involved closed cooperation between Post Danmark’s own strategic procurement staff and Valcon consultants. The objective was clear: To achieve savings here and now, but also to develop new competences and embed them in the Post Danmark procurement organisation. THE RESULTS Three months of work paid major dividends: Post Danmark achieved annual savings in the double-digit million range. In fact, Valcon’s assistance was fully funded after the first few weeks. What is more, the process gave the procurement department a new skill set that allows them to secure similar savings on their own in future. The department has also improved its dialogue with the rest of the Post Danmark organisation and with its suppliers, where mutual benefit and strict professionalism is now the order of the day. ABOUT POST DANMARK Post Danmark (The Danish postal services) collect and sort approximately 11 million letters and packages every day. These are handled and distributed among 5.2 million clients by Post Danmark’s 22,000 employees. Post Danmark’s customers include the general public as well as a full spectrum of Danish enterprises, ranging from major groups to newly started entrepreneurs. TESTIMONIALS ”In three months we have taken an in-depth look at procurement volumes worth billions and saved many millions by getting better prices.” ”We have learned a method that we know really works – and we have become able to use it by ourselves.” Carsten Christiansen, head of service centre, Post Danmark ”There can be no doubt that we have learned much from this process. We are now well equipped to handle our future procurement challenges.” Frederik Juul Johansen, strategic procurement officer, Post Danmark SECTOR Service EXPERTISE • Supply chain excellence and sourcing
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