Large medium-sized company and manufacturer of composite films optimizes raw material procurement

A large medium-sized company that primarily manufactures composite films for use as underlayment membranes in home waterproofing and operates a large production facility in Germany as well as two plants abroad commissioned ERA Group to analyze and optimize its expenditure structure for raw material procurement. The project was carried out by Rainer Martin, an expert in raw materials procurement. First and foremost, ERA Group analyzed the costs for the entire raw materials procurement process. The company had an annual procurement volume in the high double-digit millions. Potential for cost savings was identified in the procurement of plastics.To identify opportunities to reduce costs in plastics procurement, ERA Group coordinated the framework conditions with the research and development department, production, and supply chain management. The client ruled out the use of substitutes—equivalent but cheaper plastics—for key products.Due to these restrictions, ERA Group focused on negotiating the terms of cooperation directly with existing suppliers. This involved suppliers of polypropylene, additives, and polyethylene. Savings were identified and realized in all these areas, ranging from 2 percent to just over 6.5 percent.Overall, the company reduced its plastic procurement costs by 2.5 percent, which corresponds to a monetary cost reduction of several hundred thousand euros. Furthermore, following these positive results, options are being explored to approve substitutions for certain product areas. This would enable the laminated film manufacturer to generate further savings.