Successful cost reduction process for Vredo

Vredo in Dodewaard has been around in its current form since 1976. Just after the Second World War, founder Ben de Vree started a contracting company. In the very dry summer of 1976, grassland had to be sown again and because of the many works on the land — digging, ploughing, milling and seeding — he came up with an overseeder that combined these processes. In 1986, a similar machine technique was developed for fertilization and the self-driving system followed in 1992: a tractor with a tank that expels manure. Currently, Vredo supplies seeders in the agricultural and sports segments in 52 countries worldwide and fertilizer machines throughout Europe. It employs almost 150 people.

Changed market‍

As a result of corona and the war in Ukraine, Jan de Vree, operational director at Vredo and who has been responsible for purchasing for a few years, has seen the market change and prices rise. “Reason to see if we could lower the prices of our self-drivers, which consist of 80% merchandise. In addition to our two buyers, we had already hired one additional buyer, but the three of them were also unable to keep up with all developments,” he says. “Due to the hustle and bustle, we had let things change a bit when it comes to purchasing and, for example, agreements were not always also laid down in contracts. That's why we called on Kloepfel Benelux a year and a half ago to support our purchasing department in checking prices, documenting and recording agreements in contracts.”

Whole company involved

‍Kloepfel started by mapping the current state of affairs when it comes to purchasing at Vredo. “What turnover achieved with which supplier in the past three years, what have the prices been, does the argument for higher energy costs and steel prices hold up, what trend is the price now, can the price go down?” , sums up De Vree. Then, in June last year, Kloepfel organized a Supplier Convention for Vredo's thirty largest suppliers. “We prepared the convention with the entire company, from engineering, production and logistics to sales and purchasing. In addition, the right people from the departments are always involved in the discussions, including someone from Kloepfel.”

Thirty interviews

‍The convention kicked off with a general presentation by Hans de Vree. “There, he outlines how Vredo has grown in recent years. For example, some did not know that we had completed our new building a year and a half ago. We also indicated that Vredo needs good suppliers in order to continue to grow. That story was received positively,” he says. “Then, in two days, we had thirty one-on-one discussions about prices, framework contracts and how we could improve mutual cooperation.”

Savings in line with expectations

‍In advance, Kloepfel had issued an expected general savings plus a forecast of possible savings per supplier. “With some, you know it's a difficult story. Thanks to Kloepfel, we were well prepared and were able to contribute strengths. On average, in line with expectations, we were able to significantly reduce the price of the total direct material purchase volume,” says De Vree. “In addition, we found that in the past, other departments within Vredo had direct contact with suppliers, so some agreements were not widely known. It has now been internally agreed that everything goes through purchasing.” Furthermore, Vredo is now working satisfactorily with two new suppliers who were just invited to the conference.

Optimise the order process‍

Vredo is currently going through the second phase with Kloepfel, which is more focused on improving the TCO and thus on cooperation with suppliers, order quantities, framework contracts, new machines that the company wants to develop and new techniques that are known to suppliers but not yet Vredo. “Our aim is to optimize the ordering process and thus enable our suppliers to adjust their production process accordingly,” says De Vree. “We may also set out an RFQ with a number of small suppliers to investigate where we can best place orders.”

Fresh look

‍All in all, De Vree looks back positively on the cooperation with Kloepfel and the results so far. “They are very driven. Sometimes I was satisfied with the negotiations during the negotiations, but we still went out for a while and they managed to tighten the price or conditions a bit more,” he says. “And for our own buyers and suppliers, forcing strange eyes and taking a fresh look works wonders. This has helped our two buyers, who have been with us for years, to clarify things and continue to lay them down contractually. This also helps to inform colleagues internally that things have to be done differently.”