Popular search
Recently visited pages
Case Studies
Industry benchmarking gives negotiating power to sandwich and core company in China, delivering 6% cost savings
The client is a world leading company specialized in making sandwich and core materials.
They launched a new production plant in China and started to source the raw chemical materials locally from major suppliers in the market (e.g. BASF, Bayer, Momentive, etc.)
Opportunity
The client established a new production plant in Zhangjianggang in the end of 2016 and planned to start operations with a pilot production in the beginning of 2017. The company had started negotiating with eight potential raw material suppliers in China since Oct 2013 without success. With the imminent pilot run, they are now pushed to finalize the contract and price negotiations with the potentials suppliers to make sure that the raw materials are available when the plant construction is completed and ready for the initial production runs.
The client has commissioned ARC Consulting to support their global raw material team to finish the contract and price negotiation in China.
Approach
ARC Consulting proposed the following Plan of Action:
- Negotiation background research: this to confirm the status of the negotiation and understand the bargaining power with each potential supplier.
– Phase 1: understand the background of the company, suppliers and industry
– Phase 2: do a benchmark study of each supplier’s current offer (price, payment term and lead time)
– Phase 3: provide related chemical raw material market price trend analysis and forecast
- Price and Contract Negotiation Support
-Support the global raw material team during the price and contract face-to-face negotiation meeting
-Follow up the contract progress with each supplier to make sure they are completed within the stipulated times
-Compare the final price with the target and market prices and develop a price summary report
More Case Studies in “industrial goods and services”
