Procurement Optimization
Investment Governance
Enabling a top U.S. credit card issuer to realize 20% savings on print and mail spending
Client Situation:
Our client, a leading U.S. credit card issuer with mail volumes exceeding 40 million per month, commissioned our Procurement Practice to solve a two-fold challenge — breaking the existing monopoly of its incumbent suppliers, as well as delivering 10% savings on marketing spend in commercial print and direct mail.
Opera Approach:
To realize the desired level of savings, we concentrated our efforts on three categories across the client’s business units: Envelopes, Direct Mail (Forms and Lettershop) and Commercial Print.
We used the following methodology:
- Developed a comprehensive Request For Proposal(RFP) to capture spend across the different business units to leverage volume during negotiations
- Created a competitive marketplace by inviting a large pool of suppliers for the RFP
- Increased price transparency for buyers by using process based rate cards
- Eliminated brokers to reduce additional cost due to the “middle-man” margin
- Conducted multiple rounds of targeted negotiations
- Recommended demand management savings opportunities
- Supported the client in managing transition to new suppliers thereby ensuring realization of savings in the near term
Opera's Procurement Practice delivered savings of over 20% to the client. We broke the incumbent suppliers' cartel, and helped the client avoid potential cost increases from its incumbent suppliers through aggressive negotiations. We also identified additional opportunities to reduce production inefficiencies, assisting the client in finding the most cost-effective print technology for its requirements.