Data analysis at a timber distributor's subsidiaries makes procurement more efficient

The Covid-19 pandemic had in fact made the market less stable. During the crisis, people had started doing a lot of gardening but when the restrictions were lifted, demand for garden timber fell sharply.

The war in Ukraine exposed another vulnerable point in the supply chain: the company used to get a lot of its timber from Russia, and that is no longer possible due to the sanctions.

Analysis of procurement data

Together with the company’s buyers, we began collating and analysing all the procurement data. The business consists of an overarching group with six separate companies under it. It emerged during workshops with the various buyers that everyone had their own procurement process and negotiated separately with suppliers.

Varying agreements on price and payment terms

The separate companies do deliver to various different parties – ranging from DIY stores to wholesalers, or directly to individuals via a website  – but they all made use of the same (just a few) suppliers. The analysis also revealed that they were buying in timber subject to varying conditions, such as the price and payment terms.

Overall procurement process

We then worked with the buyers to determine where they could add the greatest value to the overall procurement process. Among other things, we looked at the prices charged by suppliers for different types of timber, the possibilities for collective procurement, the quality of the timber, and the sustainability of the packaging material and what it costs.

More efficient and cheaper

The conclusion was that the entire procurement process could be made more efficient and cheaper, with a saving of three to five per cent being possible. That quickly adds up to several tens of millions of euros annually. The improvement plan we drew up together is now being implemented by the company.