Strategic Cost Management
Progroup enhances profitability by achieving 8% savings through strategic sourcing, streamlined supplier management, and improved data transparency.
Challenge for the customer
Progroup, a family-run company in the paper and packaging industry and a European market leader in the paper industry in its segment with 17 production sites across Europe and the UK, had already established a successful, decentralized operating model. Local MRO processes ensured a smooth daily performance and supported the company’s strong market position. With steady growth and a clear focus on operational excellence, Progroup had the opportunity to go one step further by harmonizing and bundling MRO management across all sites and unlocking synergies to transform a well-functioning system into a true best-in-class system. Together with H&Z, the company embarked on a journey to take its strategic cost management to the next level in 11 categories.
The H&Z approach
As part of a focused strategic sourcing approach, H&Z’s consultants needed 6 months to establish the system and identify suppliers for the relevant MRO categories. By enriching the existing MRO parts data in specific categories and working with an AI-based system partner, market baskets were developed and made available to potential suppliers in a competitive bidding process. In addition, the existing service providers were segmented and potential preferred partners were pre-selected in close consultation with the locations. Through a three-stage RfP and negotiation process and interdisciplinary collaboration, the new supplier base for Progroup was nominated, allowing the company and Procurement to reap all the benefits of the improved supplier base.
The results
Based on the existing MRO spend, Progroup was able to realize savings of >8% on average. The significantly reduced supplier base (from >1,000 to <100 suppliers) also enabled Progroup to reduce process costs and optimize collaboration models.
“In H&Z, we found a partner who ensured that the project results and agreements with the supplier partners were realized in contracts and that we did not have to make any compromises in terms of quality, security of supply, flexibility and service or in our cooperation with the suppliers.”
About Progroup AG:
Progroup AG, based in Landau, Germany, is one of the leading manufacturers of corrugated base paper and corrugated board in Europe. Since its foundation in 1991 in Offenbach/Queich, the company has pursued a consistent growth strategy based not only on technological leadership but also on the use of innovative and environmentally friendly production techniques. Progroup operates production sites in six countries in Central Europe. These currently include three paper mills, 13 sheet feeder plants, a logistics company and a waste-to-energy power plant. The second power plant is currently being built in Sandersdorf-Brehna near Leipzig. With around 1,781 employees, the company generated sales of around 1.3 billion euros in 2024. Progroup received the PPI Sustainability Leadership Award in 2023 for its commitment to sustainability.
