Cost reduction resulted in profitability for the EBITDA margin
BACKGROUND
An apparel company with annual purchasing volume from China of $15M in knitwear, woven wear, and outerwear. Years of stagnant organic growth combined with a higher than budgeted cost of goods forced the company to find other solutions to relieve margin pressure. They had not met their target of a $3M cost reduction in direct purchasing of goods due to not having the right internal team to maximize the current and potential value of their China sourcing activities.
APPROACH (at a glance)
• Managing the merchandising process: handled the pre-development, development & production process.
• QC according to AQL 2.5.
• Supplier matrix development to fully aligned with set business strategy.
• Drive cost reductions.
• Full visibility within the end-to-end supply chain along with CSR implementation to ensure standards are met every step of the way.
• Collaborate with key suppliers to optimize relationship and to become preferred customer.
• Strategic sourcing with category management.
• Contract management.
RESULTS
EPG's service, support and insight led our client to achieve EBITDA margin profitability and cost reduction benefits that competitors cannot replicate.
Within 11 months, EPG’s procurement outsourcing operation contributed to our client lowering their costs by more than $3M on knitwear, woven wear, and outerwear. A new 2023 procurement strategy with our client is already in operation.
* We take our clients' confidentiality seriously.
While we've not included their names, the results are real.
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