Large medium-sized company and manufacturer of composite films optimises raw material purchasing

A large medium-sized company that mainly manufactures composite films for use as underlay membranes for house waterproofing and operates a large production facility in Germany and two plants abroad commissioned ERA Group to analyse and optimise its expenditure structure for the procurement of raw materials. The project was carried out by Rainer Martin, an expert in raw materials purchasing.

First of all, ERA Group analysed the costs for the entire raw materials procurement process. According to the analysis, the company had an annual purchasing volume in the high double-digit million range. Potential for cost savings was identified in the procurement of plastics.

In order to identify opportunities to reduce costs in plastics purchasing, ERA Group coordinated the framework conditions with the research and development department, production and supply chain management. The customer ruled out the use of substitutes – equivalent but cheaper plastics – for important 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 realised in all these areas, ranging from 2 per cent to a good 6.5 per cent.

Overall, the company reduced its plastic purchasing costs by 2.5 per cent, which corresponds to a monetary cost reduction of several hundred thousand euros. In addition, following the positive experience, options are being examined to approve substitutions for certain product areas. This would generate further savings for the composite film manufacturer.