How a brand reduced their COGS by 10% in just 9 months

 

This case study proves that when you invest in your supply chain properly, you can transform your business and give yourself a real competitive advantage.

⭐⭐⭐⭐⭐ “Genuinely could not have done this without them”

 
A high growth fresh food brand

This story is about a >£2m turnover fresh food brand, producing ready meals for sale in retail. The brand was less than 5 years old and the founders were heavily focused on sales and marketing. The business was forecasting a 200% growth trajectory for the following 12 months.

How a brand reduced their COGS by 10% in just 9 months 1
 
Growth being stalled by existing manufacturing setup

With more listings coming down the pipeline, the founders were concerned that their existing manufacturer was going to present a bottleneck for the business – the capacity simply was not there to scale without significant investment, which the manufacturer was not prepared for. The brand would have to either move production in-house or find a new fresh manufacturer in time for a range change only 9 months later.

After much consideration, the founders decided that their strengths were in sales and growth. They saw value in focusing on this rather than building a factory from the ground up. So they began the search. It was never going to be easy – with a 7-day shelf life and very high quality ingredients, the margin for error was incredibly small. They used Google and their network to find potential partners, but most of the factories were too large and struggled to see the value of a high-growth brand.

If they could not solve this problem, they would need to delay planned launches into new retailers and put the whole business at risk.

 
Parachuting in transformation expertise for less than a year

Knowing the importance of getting this right, the founders engaged the services of YF’s Supply Chain Team. Over the course of the next 9 months, while the founders were growing their business, we carried out an end-to-end factory engagement project

The first step was to establish the ‘sell’ with the brand. Why would a factory want to work with this ‘small’ brand? This would form the approach and pitch framing.

From there, we carried out a full market search, using a mix of our databases and networks. We analysed and reduced this list to a shortlist of 10 factories, approaching them one by one.

As a recognised third party, we were able to give the brand their due attention from the leading manufacturers in the UK. They no longer blended into the crowd of hundreds of brands approaching that manufacturer.

Once we had presented the proposition strongly and in the language of a manufacturer, we let the founders lead their pitches, ensuring they were properly briefed by our team and that we were always in the room to frame things correctly and step in for complex matters.

The founders did a fantastic job and we had 4 manufacturers interested in pursuing a contract. When we finally picked the right manufacturer, we led the way with legal and commercial negotiations, as well as operationalising the partnership. This included ways-of-working, logistics network design, process design and more.

Concurrently, the YF team also setup systems, software integrations, supported in the establishment of specs, SLAs and QAS so the full supply chain was ready to go.

How a brand reduced their COGS by 10% in just 9 months 2
 
A long-term deal with strong commercial grounding

In time for their growth scale-up, the brand signed a long-term contract with a fantastic manufacturing partner who believes in their vision as much as they do. The solution negotiated was thorough but innovative – exactly like the brand and enabling their vision.

While the primary objective of the project was operational our approach to commercial negotiation saved the brand 10% on COGs – something ‘better than [they] could have ever imagined’. Over the next 5 years, this should further improve to 20%+ based on the contract negotiated.

The team now have the capacity to scale the business while trusting their partner to deliver the high quality of product that their consumers have come to expect.

⭐⭐⭐⭐⭐ “Genuinely could not have done this without them”

“YF were more than just advisors; they felt like a part of our team and were as passionate about getting the right results as we were.

The fact that we extended our contract with them multiple is testament to the strong working relationship we established with the team. We will definitely be working with them again on further transformation projects later this year.”

The Client

⭐⭐⭐⭐⭐ “Open-minded and truly impressive"

“This series of projects was one of our favourites to deliver. The founders were some of the most impressive people we have worked with - really recognising the long term value to their business of getting this transformation right.

Finding the right manufacturers is never easy - and the bar is even higher when you are coming from a manufacturer you love that just isn’t big enough. But they were open-minded, trusting and listened to advice. They trusted us to establish a deal that will do their brand justice and I am genuinely delighted that they ended up with such a fantastic outcome, with a real impact on their business profitability at the same time.

We are looking forward to working with them even more in their quest to create competitive advantage through supply chain excellence and thank the team for trusting us with their baby.”

YF Supply Chain Team
Top 3 things the brand learnt during this process 
  1. The sell really makes a difference. ‘We approached some of the same manufacturers as YF but they did not even respond to us. YF made it look so easy but that’s because they approached it like pitching to investors, something we’ve never done.’
  2. There is value in independence. ‘Having YF as a third party vouching for us just made every conversation easier, particularly the more difficult ones.’
  3. A well structured negotiation can really pay off. ‘We really never imagined we would get the savings that YF delivered. As a brand you just don’t know what is normal to pay and it’s really hard to negotiate blind!’

Do you need help with your supply chain too?

Our team can help you transform your supply chain, implement new systems and ultimately take a weight off your shoulders and improve your bottom line.

Want to talk with our team? Get in touch

 

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