Hardware Retail
Adding procurement capability from day one
Situation
A leading European hardware retailer sourcing more than USD 50 million annually from China faced increasing procurement complexity and declining commercial performance. Its own sourcing office had operated in China for more than a decade, but procurement activities had gradually become decentralized, with supplier decisions driven by local relationships rather than strategic procurement practices.
Key challenges included:
• No structured supplier approval or governance process.
• Long-standing supplier relationships limiting competition and innovation.
• Limited development of alternative suppliers.
• Procurement risks were not systematically managed.
• Limited procurement transparency and commercial control.
• Procurement was viewed primarily as an operational function rather than a strategic driver of profitability.
To strengthen its procurement capabilities, management decided to close its own sourcing office and appoint EPG as its dedicated procurement organization in China, combining day-to-day procurement operations with long-term strategic sourcing expertise.
EPG Contribution
Operating as an extension of the client’s procurement organization, EPG assumed full responsibility for procurement operations in China while implementing best-practice procurement processes.
Key initiatives included:
• Managing daily procurement operations for private label products.
• Implementing strategic sourcing and supplier development initiatives.
• Driving continuous procurement cost reductions through competitive sourcing and commercial negotiations.
• Establishing supplier governance, qualification and performance management.
• Increasing supplier competition and reducing dependency on individual suppliers.
• Strengthening quality assurance, production follow-up and supplier compliance.
• Improving procurement transparency through structured reporting and performance monitoring.
• Supporting long-term procurement strategy aligned with the client’s commercial objectives.
Business Outcomes
Operating as the client’s procurement organization in China, EPG transformed procurement into a strategic commercial function that delivered measurable financial results while strengthening long-term supply chain resilience.
Key outcomes included:
• More than USD 12.5 million in procurement savings based on over USD 50 million in annual purchasing from China.
• Stronger supplier governance and improved procurement transparency.
• Increased supplier competition and greater commercial leverage.
• Reduced supply chain risk through supplier diversification and proactive risk management.
• A more resilient and scalable procurement organization capable of supporting future growth.
Client Confidentiality
To protect our clients’ commercial interests and confidentiality, company names have been omitted. All business cases are based on actual client engagements and measurable procurement results.
