CPG Distribution Company Saves an Estimated $1M in Renegotiated Supply Chain Agreement

Background

A $1.8B privately held, national CPG distribution company was re-negotiating their contract with a supplier. Instead of receiving credit for actual product returned to the manufacturer within warranty, they were moving to a model where the distribution company would manage warranty in return for an upfront discount. The company had historical data on warranty claims and were trying to determine 1) what was a reasonable discount and 2) were there any patterns in warranty claims.

Solution

After defining the high-level business challenge and understanding the current state of the data, Firefly gathered the available information for conversion to usable formats. Various analyses were conducted to provide business insights. Predictive models were created to draw statistically relevant information.

Results

The project yielded several positives: the business was able to enter negotiations with evidence that would ultimately drive a fair discount rate. This insight saved them an estimated $1M in warranty claims. It also exposed opportunities for improvement in their product life cycle tracking, and identified a path forward to develop a more robust warranty claims analysis process.

Want to see results like this at your company? Contact our team to learn more.

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