CASE STUDY

Multi-year Cost Transformation Journey for a Resilient Future ahead

Our client is a private owned company which is a worldwide market reference in manufacturing and sales of cards and games. In the past years, the group has shifted towards mirror plants across the different regions in the world to be able to offer their clients one customer experience close to the market. To enhance this global alignment, the company engaged ASV to support its transition toward a unified procurement organization—one that ensures consistency across regions while remaining agile in the face of future market fluctuations.

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Strategic Context

Cooling board games (important BU) interest after Covid-19 lock-down

Inflation of material costs vs. pressure of from major clients to push costs

Political unrest impacting scarcity of goods

Challenges
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Challenges
  • High degree of decentralization and no unified way of working between the numerous operating companies
  • Data structure and quality doesn’t facilitate required (strategic) spend and opportunity insights
  • High number of people focusing on operational tasks instead of value adding tasks
Objectives
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Objectives

Our objective was to synergize the group’s way-of-working by:

  

  • Leveraging end-to-end parenting advantage of the group (synergies), including effort on the working capital reduction
  • Structural improvement of data quality to turn data into structural and more agile business/market intelligence
  • Further professionalize the Supply Chain and Finance team & create competitive advantage by focusing on innovation
Our approach
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Our approach

The project started with a diagnostic of the Procurement, Supply Chain and Accounts Payable function, including qualitative and quantitative benchmarking with peer companies. This assessment revealed substantial improvement potential in various areas and resulted into a 3 year roadmap.

Phase 1 has mainly focused on installing a category structure to address a broad range of value levers:

  • Design of a new center-led organization structure – enabling controlled autonomy by combining category expertise with local proximity.
  • Deployment of cross-functional initiatives regarding the cash conversion cycle with focus on payables and raw material inventory.
  • Realization of quick win savings for pilot categories (phased approach) in combination with the setup of a value tracking process.

Phase 2 had a stronger emphasis on the capability uplift to sustain the savings in the future.

  • Focus on further installing a global operating model and policies to support the new organization.
  • Onboarding of a Centre of Excellence Manager (to streamline the way-of-working across the different functions) and Best Cost Country Sourcing Office.
  • Analysis on coverage (fluctuating indices covered in sales contracts) and the risk management of selected core categories to move from cost to margin management across the supply chain.
  • Assessed benefit case and roadmap on E-procurement tools & digitized processes (S2P-tooling).
  • Install a methodology of Scope 3 emission modelling.

Phase 3 (the way forward) will emphasize expanding the use of digital tools and initiatives for pricing and portfolio management.

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Results
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Results
  • From a plant-based (decentral) to business-driven category management (central) approach with support offices in in low-cost countries and free trade zones
  • From data to business intelligence – A control tower was built to consolidate the available data and to define the right priorities and enable high impact procurement.
  • From cost to margin management – Realization of 1.5% EBITDA impact, supporting both top & bottom-line improvement.