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Exceeding

Novati

Supplier consolidation and improved supplier relationship management

About Novati.

Novati is a leading waste management broker covering the United Kingdom. But waste collection is not their core business, Novati focus on resource and carbon management, where waste is a by-product. They work with highly respected brands across the hospitality, distribution, transport and facilities management sectors.

Overview.

As a brokerage, Novati outsources its waste management and collection processing. This model has resulted in a multitude of complex supplier contracts which were inconsistent and lacking in efficiency. The decision was taken to review all their incumbent suppliers with a view to reduce, not only costs, but also the number of suppliers to streamline efficiency.

With no internal procurement team, Novati lacked the knowledge, resource and data to be able to take on such a complex review and possible renegotiations or tender process. They were also concerned about the potential impact on service delivery and existing supplier relations.

They appointed eXceeding at the very start of this process – the review stage – and we worked with them to engage with their UK supply chain, identify their more critical suppliers in each region and offer them the opportunity to become preferred suppliers. The result was not only cost reduction, but also internal cost avoidance and an optimised model for suppliers and customers.

The challenge.

We identified 3 key challenges which needed to be addressed as part of the project:

Too many suppliers
This made it increasingly difficult to manage and incurred high internal overheads.

Inconsistent data
There was a need to standardise this amongst suppliers.

Strategic supplier relationships
These were needed to be established with a small number of key suppliers.

The solution.

eXceeding agreed a ‘risk and reward’ model with Novati, offering to work on the basis that part of our fee would be paid from the savings generated. We conducted a review of all suppliers, identified opportunities for consolidation, to reduce cost and management time and delivered consistent contract terms across the supply chain.

  1. eXceeding conducted a review of all supplier spend to provide visibility of the requirements to each supplier. This enabled us to offer a more direct comparison of varying data in order to proceed with a recommended consolidation of suppliers and consistent pricing recommendations.
  2. A shortlist of suppliers was created by region, who could be considered preferred suppliers. These suppliers were then approached and –  using the data and pricing information – we were able to reallocate work to the most cost-effective suppliers without impacting service delivery.
  3. A clear supplier relationship management strategy was agreed including improved payment terms, manageable SLAs and better visibility, and consistency, of supplier performance indicators.

Highlights.

8-month
contract term

Saving £700,000+
per annum

Consolidation of suppliers
to reduce spend and time

Improved payment terms
and consistency in contracts

The future.

Novati made substantial reductions in the complexity of its supply chain whilst also improving cost and service delivery. The reduced model is much more efficient to manage and has also provided a cost effective delivery model to secure numerous new national contracts.

eXceeding’s team has since provided recommendations of a transition strategy, along with contract negotiation support on a strategic IT project.