When customers crave sweets, everything has to go right

A good balance between price and quality was one of Privab's requirements when participating in a group-wide transport tender.

‘We work with what gives the “edge” and what tastes good. Also products that provide energy and power that you can find at a gym,’ says Jonas Carpvik, interim Chief Operations Officer at Privab.

Privab is a wholesaler of sweets, snacks and drinks for the service and grocery trade, as well as functional food such as energy bars and energy drinks that are supplied mainly to gyms and training centres.

For a few years now, Privab has been one of almost 50 companies in the listed global group Humble Group in FMCG (Fast Moving Consumer Goods). Privab has over 4000 stocked products and deliveries throughout Sweden, with Trollhättan as a hub for warehousing, purchasing and sales.

Supplies everything from the small kiosk on the corner to the supermarket in the city centre

Privab has an origin in working towards service trade with everything from small kiosks and small shops to now having developed to be a major supplier also to grocery stores such as ICA.

Jonas Carpvik says:

Chain customers mainly work with planned deliveries, but we have also had smaller customers for a long time who can place their order today until 12 noon and have the delivery the next day. This places very high demands on our organisation with everything from warehouse picking to ensuring that deliveries to customers work.,That's why we are largely a logistics player.’

Group-wide procurement
Humble Group owns several companies that have intensive transport solutions and needs. According to Jonas, Privab accounts for the largest and perhaps most complex freight volume within the group because they have the type of customer structure they have and are also very transaction-intensive. Privab was invited to a group-wide procurement project and immediately accepted. Jonas continues:

Humble Group set up a project group that I was part of and we got very good help from TransportRådgivarna. Together with our sister companies, we went through how we worked with our transport in each company at present and what we would need going forward.

TransportRådgivarna then helped to analyse existing solutions and also advised on what could be done instead. This then resulted in a procurement document. After the selection of alternative solutions, two finalists were selected and scrutinised, resulting in the final choice of transport provider.

The balance between price and quality
An important factor for Privab was to carefully consider the quality aspect of the transport provider in the tender and not just focus on a low price.

 

We can't just get hung up on saving money at the expense of inconveniencing our customers. I must say that the people we worked with at TransportRådgivarna were very good at balancing the parameters of quality and price throughout the project,

One of the requirements in the procurement was also to have only one interface with one supplier, who in turn can have subcontractors who handle the transport. The goal has always been to find a total solution. Another important aspect was that Privab needed to have a very flexible carrier that can switch up in the face of large volume increases for special campaigns that require larger deliveries, such as Halloween and Easter.

Changing routines and suppliers can be demanding
Jonas also points out that you should be aware that there can be a certain amount of anxiety within an organisation when it comes to changing transport suppliers. ‘In some regions, they had worked with the same carrier for many years and never made any changes. Privab had established routines, and customers knew the drivers who came and delivered. This could create some nervousness about the change, as many had some specialised knowledge, such as driving goods to odd addresses with special conditions. Here, the Transport Advisers were also important to their own organisation internally, where they helped to convince employees of the benefits of a procurement. And, after a short familiarisation period, most things have now fallen into place.

And was it worth it?
Jonas reveals:

Yes, but really! Overall, it's gone really well, and better than we expected. And we have actually made a saving of about 10% on our transport costs.

Another part that was very beneficial was the whole process of reviewing all the flows and scrutinising them. This identified several details where cost savings could be made and new smart ways of working could be found. Jonas summarises:

And not least, we got an outside perspective from good logistics people who could say: this is how you do it today, but could it be possible to do it this way instead? In this way, the project contained more than just a new transport solution and a lower cost, we analysed the entire logistics.

The process - this is how Privab's transports were optimised

• The logistics manager at Privab produced documentation and statistics for TransportRådgivarna in the form of, for example, driving routes, volumes, number of pallets, deviations between normal days and certain major weekends.
• The data was processed and analysed by TransportRådgivarna and became the basis for a procurement document.

• Ongoing project meetings to check that everything was on track and that the right requirements had been identified.
  
  
• When the tenders came in, Privab spent a lot of time and focus on going through them with TransportRådgivarna, analysing them and comparing them with the current solution.
  
  
• Selection of transport company and contract, where everything was handled by TransportRådgivarna.