Case Study: Driving Procurement Savings for Asda in the Baby Category

The Challenge: Addressing Supply Limitations and Cost Increases

Asda faced a significant challenge in the baby category, particularly within baby care and baby food. The retailer had a limited supply base, and existing suppliers had implemented multiple cost increases throughout the year. To remain competitive and maintain affordability for customers, Asda needed a strategic approach to sourcing that would not only secure reliable suppliers but also drive cost efficiencies.

Our Approach: A Strategic e-Tender Process

To address Asda’s procurement challenges, we conducted a comprehensive e-tender process, leveraging our expertise in supplier search, spend data analysis, and global market intelligence. Key steps included:

• Detailed Supplier Search – We contacted over 40 suppliers per category to ensure Asda had access to the best potential partners.

• Shortlisting the Best – After a rigorous evaluation, we narrowed the list down to seven high-potential suppliers for e-tender participation.

• Engaging Technical and Product Teams – Given the high-risk nature of baby food, we worked closely with Asda’s technical and product teams to ensure compliance and quality standards.

• Benchmarking Against Other Retailers – We identified suppliers who had successfully supplied major retailers such as Aldi, Lidl, Tesco, Morrisons, and Sainsbury’s, ensuring Asda had access to well-vetted partners.

The Results: Significant Cost Savings and New Supplier Options

The e-tender process yielded impressive results, delivering significant savings while expanding Asda’s supplier base:

• Cost Savings of approximately 8% – A leading supplier within the category , emerged as the top contender, offering Asda an immediate savings opportunity of 8%.

• Supplier Diversification – Another strong supplier, closely followed and is currently undergoing further evaluation with Asda. Its important to remember price is always only one part of the value equation.

• Enhanced Contract Flexibility – By identifying multiple supplier options, we enabled Asda to split contracts where necessary, reducing risk and enhancing supply stability. This model mirrors Aldi’s approach to managing private label volumes.

Lessons from e-Tender Success in Baby Category

Asda has historically benefited from strategic e-tender initiatives, having run 144 projects in a peak year, resulting in significant savings amounting to approximately 10% of total spend. Moving forward, we recommend a more targeted approach, focusing on high-impact categories that have proven success in other retailers, including:

• Confectionery

• Bird Food

• Wipes (Baby & Household)

• Bin Bags

• Canned Fish/Tuna

• Water

• Sugar

• Batteries

• Light Bulbs

The Future of e-Procurement at Asda

With a proven ROI of over 3000%, e-tendering remains a powerful tool for Asda to drive efficiencies and cost savings. Looking ahead, we propose scaling up efforts by running e-tenders across 10 to 20 key categories in the next year to maximize savings and supplier diversification.

Looking to Optimize Your Procurement Strategy?

If you’re interested in exploring how technology-driven procurement solutions can enhance your cost efficiencies and supplier relationships, contact us today. Let’s drive smarter sourcing together.