Vitamin Pill Maker Supplements Profits

The Challenge

When a large international vitamins manufacturer sought to improve its financial health, they turned to ERA for healthy advice. Experienced ERA consultants reviewed the client’s non-core costs to determine if additional savings could provide extra cash flow. Cost-savings opportunities for laboratory supplies emerged.

The Solution

Because ordering laboratory supplies was a relatively routine process for laboratory personnel, an examination of supplier pricing — and potential cost-savings opportunities — was largely overlooked. Fortunately, ERA’s review pointed to savings. First, more favorable pricing was negotiated for recurring items such as glassware, equipment, general supplies, chemicals and even specialized products including syringes. Second, significant pricing discounts off the list price were negotiated for other items from these categories, even items considered critical for testing accuracy.

ERA also recommended monthly monitoring of all purchases to verify the maintenance of special pricing and discounts.

The Results

  • Significantly reduced lab supply costs by 38%, adding $54,000 to the organization’s bottom line
  • Achieved greater control over costs, ordering processes and purchasing policy
  • Enhanced cost-savings opportunities through supplier consolidation
  • Minimized supplier pricing discrepancies through monthly monitoring
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