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Coop improved contract compliance and streamlined procurement with Proceedo

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The challenge

Low contract compliance and lack of purchasing support

Centrally, there was a struggle to achieve the desired contractual compliance. At the same time, there was uncertainty in the stores as to whether the orders placed were actually in line with the contracts. And in the stores, customers could not be sure that they were getting the best deal. Orders were usually placed by phone or email, which was both time-consuming and difficult to control.

- We wanted to give our purchasers better support so they could always be sure they were getting the best deal by buying through our central contracts. They would know what assortment applied and quickly be able to find and order exactly what they needed," says Martin Hansson, Head of Procurement at Coop.

Stora-Coop-Vastberga

The solution

Streamlined procurement with Proceedo

Coop decided to use Proceedo to manage internal purchases of primarily consumables and store equipment in a one stop shop.

- "We wanted our users to be able to order everything in one place, where we put the products from our contracted suppliers. With this, we wanted to both reduce costs and make customers feel confident that they were making good purchases," says Martin Hansson.

In order for this to work, it was important that buyers could easily find what they needed. Coop solved this by improving its product categorization. Previously, they had had a reporting structure to follow up on costs, which could now be used as a basis for the new category tree.

Coop spent about four months setting the structure for the categorization. It was a big job and the involvement of the stores was crucial.

- It is important to get the opinion of the buyers, as they are the ones who know what keywords they use to find a certain product and where in the tree they expect to find it. So we asked them what words they used when searching for something and how they looked in a tree," says Martin Hansson.

The other side of the equation for effective product categorization was getting suppliers on board. It was a matter of getting the suppliers to realize that they would now only deliver the products that were in the category tree, even when they received requests for other products. It was also important that the suppliers took on board the requests from the stores and passed them on.

- The suppliers have a lot of information about how the stores reason and this can benefit us, the stores and the suppliers. We have regular meetings with suppliers to see if there is a high demand for products we do not have agreements for. If there is, we have to adapt our range accordingly," says Martin Hansson.

Coop consists of three different store concepts: Coop, X-tra and Stora Coop. This means that Coop is also reviewing the categorization and the range that each concept should get in the system.

- "If you work at a Stora Coop store, you should only see the range that is relevant to that particular store concept and not things that only concern Xtra or Coop stores," says Martin Hansson.

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The result

Higher contract compliance and savings on indirect purchases

The Coop has now achieved much better contractual compliance and also managed to make savings on its indirect material purchases. It all depended on the users really making sure they used the new solution.

Two months after implementation, uptake was 50% and after six months it had risen to 90%. Getting users to accept the new solution went quickly and today it is natural for buyers to go through the order portal to place their orders.

Coop has now managed to consolidate both suppliers and assortment and thereby found better pricing. In addition, Coop has gained several other advantages.

It will be much more efficient in terms of time for the employees in the store when they can place all orders through the portal instead of having to call or email. We can also control the assortment in a completely different way than before. Suppliers also receive their orders in a single way now, which means that they can make savings in their chain that we can benefit from," says Martin Hansson.

Coop is now moving forward with its improvement work and has a good base to build on.

- "We want to further consolidate the range. The long-term strategy is to gather larger volumes from fewer suppliers, and since Proceedo has worked well so far, we expect that the solution can help us with our improvement work in the future as well," says Martin Hansson.