Business Development - Meeting year-over-year purchase cost reductions goals of a US Fortune Company

Company:
CLOPAY EUROPE
Aschersleben/ Frankfurt, Germany

Information:
extruded and printed films for hygiene products and protective apparel; subsidiary of Clopay Plastic, Griffon Corp., NYSE: GFF

Period:
2013 – February 2018

Role:

Responsibility:
Recruited to manage $150M business, 550 workforce, 2 German sites, and sales across EMEA

Situation:

The relationship with the major customer, 70% of sales, was stressed to the point of losing business.
The customer’s purchasing organization had the target to deliver year-over-year purchasing cost savings of 5%.
The task was to stabilize customer relationships and maintain volume with the customer.
The goal was to improve profitability

Challenge:

Meeting the customer’s cost reduction target by price reduction would have been detrimental.
Explore out-of-the-box ways to help the customer’s purchasing organization to meet their target and retain the volume and profitability with the customer.

Execution:

I interacted with the customer’s purchasing organization to understand their target – it turns out the target was overall cost of ownership savings and not just sales price reductions.
With this information I convinced the customer’s organization to analyze jointly and collaboratively the overall cost picture within the customer’s and our business, i.e., the joint value stream.
Getting buy-in from the customer’s organization and Corporate management to talk openly was a major milestone.
Together with internal lean experts I lead sessions with representatives of the customer – managers from several site, the purchasing organization, the lean organization – and our team to map the joint value stream.
We uncovered opportunities in logistics costs and inventory at the customer’s and our sites.
Joint projects were set-up and executed to monetize these opportunities.

Result:

The savings of the value stream mapping and minor product cost-out projects added up to meet the target of the customers purchasing organization.
Based on the success of the collaborative work a first of its kind three year 300 mio $ purchasing contract with joint commitments on volumes and pricing was worked out, signed, and executed on.
Customer intimacy was at a top level.
In addition to the volume commitments, we lleveraged Lean and increased productivity, beating EBITDA target by 29% within two years

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