Client Situation
Our client is the branded producer of bottled water, juice & other consumer goods involving tissue papers. The client is a UAE based consumer goods company, asking for Cedar’s help with re-engineering their business processes in order to identify significant cost and revenue benefits for the company. They have therefore approached Cedar to aid in improving its processes in order to increase overall profits of the group.
Cedar’s Approach
Cedar formulated a process improvement strategy, by focusing on the three core functions of the client’s internal processes: Procurement, Manufacturing, Sales & Marketing. The following activities were conducted under these 3 core functions:
- In the Procurement area, issues were identified in the broad areas of un-hedged purchasing, contractual purchasing, supplier tracking and approvals
- In the area of Manufacturing, issues were identified in the broad areas of production planning, MRP utilization and costing
- In the Sales & Marketing area, issues were identified in the broad areas of Advertising & Marketing, Direct Distribution & Key Accounts, Vending Machines and MRC
Outcome
Based on the above identified issues, strategic recommendations with a function-wise outlook of the client, were formulated by Cedar:
- Procurement: Management of raw material purchasing through contracts and hedging
- Manufacturing: Revised costing for preforms/caps to improve market-competitiveness and boost sales
- Sales & Marketing: Consolidated media buying (non-newspaper), differentiated distribution strategies to reach lower-value outlets, higher-yield locations and tracking for coolersoptimized salesmen allocation and route planning
These recommendations sought to have the end goal of primary financial impact on increasing the profits & reducing the costs of the client along with accelerating the revenue & releasing working capital worth ~AED 2 million. It was estimated that implementation of these recommendations could increase the client’s net profit by ~74% on a yearly basis.