Nestle Outsourcing Print Procurement

Solution provider Cirqit to manage print spend for three S. American units of food giant

Whippany, NJ — May 13, 2003 — Food and beverage maker Nestle has signed up e-procurement solution provider Cirqit to provide support for three of the company's South American units.

Under the terms of the agreement, Nestle Chile, Nestle Argentina and Nestle Peru will outsource all print-related procurement, sourcing and supply chain management activities to Cirqit.

Similar to many other global organizations, the print procurement function was autonomously maintained by each country in which Nestle operated. Cirqit will place staff onsite in each country with category expertise, best practices and software applications to work with the local Nestle staff to meet the unique requirements of print procurement and supply chain management.

Cirqit assumed management over the print procurement process for Nestle Chile last fall and said it has already delivered 23 percent hard dollar savings over the cost of previously procured materials, as well as an optimized supply base capable of meeting the local and corporate business requirements.

Nestle Peru will transition the print procurement function over to Cirqit at the end of this month, and the Argentine unit will adopt Cirqit's software and services shortly thereafter.

"This business process outsourcing contract with Cirqit allows Nestle to meet their corporate cost savings goals for each country, while remaining focused on core objectives and competencies," said Cesar Gonzalez, supply chain director at Nestle Chile. "We chose Cirqit based on their ability to deliver an end-to-end spend management solution for the print category. We are already experiencing tremendous savings over previous price paid."

Cirqit's outsourcing operations group will provide managed print procurement services for Nestle that include a combined solution of e-procurement software, business services and print purchasing experts. In addition to managing print procurement at the buyer level, Cirqit says it will consolidate Nestle's print supply chain, negotiate contract pricing, standardize processes and implement best practices.

Nestle will use Cirqit's electronic request for quote (eRFQ) application, Order-It, to submit requests for print production. Cirqit buyers will then use Order-It and the provider's price management application, Price-It, to source work to the most cost effective supplier and manage supplier pricing contracts over time.