A multi-category retailer was managing relationships with 285 different vendors, creating inefficiencies in procurement, quality control, and supplier management. The fragmented vendor base resulted in high transaction costs, inconsistent quality standards, and limited negotiating power on pricing and terms. The company was spending 40% more on freight due to small order quantities and managing complex communication channels across multiple supplier tiers.
Consolidate the vendor base to improve negotiating power, reduce transaction costs, streamline quality control, and negotiate better payment terms and lead times.
Conducted comprehensive vendor audit analyzing volume, quality metrics, delivery performance, and cost structure for all 285 vendors
Categorized vendors using Pareto analysis: 20 vendors supplied 80% of volume, while 165 vendors represented only 5% of purchases
Developed vendor consolidation strategy prioritizing strategic partnerships with top performers and complementary product coverage
Negotiated contracts with 45 consolidated vendors focusing on volume discounts, improved terms, and service level agreements
Implemented vendor scorecards tracking on-time delivery, quality (defect rates), responsiveness, and cost competitiveness
Created phased transition plan with 12-month implementation to manage supply continuity risks
Established quarterly business reviews with key vendors to drive continuous improvement
Vendor performance analysis using Excel, SQL, and Power BI to identify consolidation opportunities and track cost savings.
Analysis Tool: Excel
Analysis Tool: Power BI
Analysis Tool: SQL + Tableau
Vendor Reduction
Cost Savings
Lead Time Improvement
Successfully consolidated vendor base from 285 to 165 vendors, reducing management overhead and transaction costs. Volume concentration with top vendors enabled 12% cost reduction through volume discounts and improved pricing negotiations. Average lead times decreased by 15 days as freight consolidation became possible with larger order quantities. Quality metrics improved with standardized vendor performance management. Procurement team efficiency increased, allowing redeployment to strategic sourcing initiatives. The company strengthened partnerships with key suppliers and gained competitive advantages through collaborative planning.
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