Successfully Navigating a Supplier Bankruptcy

HAVI helped a large supplier after abruptly announcing bankruptcy to leverage its vast network and strong relationships with other suppliers to secure additional capacity, prevent disruption to supply and minimize the financial impacts to the supplier’s customers.  

CASE STUDY FOCUS: PACKAGING TECHNOLOGY INTEGRATED SOLUTIONS

Successfully Navigating a Supplier Bankruptcy

When a large supplier abruptly announced its bankruptcy and closed its plants, HAVI leveraged its vast network and strong relationships with other suppliers to secure additional capacity, prevent disruption to supply and minimize the financial impacts to its customers.

Challenge

Abruptly and without warning, a major U.S. supplier of disposable cutlery and drinking straws announced its bankruptcy and the planned closure of its domestic manufacturing facilities. Its customers, including HAVI, for whom it was the largest supplier by share in the straw category, were suddenly challenged to find capacity, maintain supply and avoid business interruption for their customers.

The struggling supplier offered to maintain supply for three months if its entire customer base would agree to a significant price increase. If not, it would cease production immediately. Customers had a small window of time in which to consider the supplier’s offer and respond. HAVI needed to quickly identify alternative suppliers and present options and a recommendation to its customers, which included several quick service restaurant (QSR) chains.

Solution

HAVI, a leader in packaging solutions and merchandising planning and promotions management, with deep expertise in the QSR and foodservice markets, notified its customers, including

a leading global QSR chain with thousands of retail locations, of the situation and the steps it was taking to mitigate its customers’ risk. HAVI recommended that its customers forgo the faltering supplier’s offer and pursue capacity elsewhere; however, because the bankrupt supplier was so large and provided product to so many QSRs, the need for capacity was great and competition for suppliers that could meet demand was suddenly very high.

Working tirelessly on its customers’ behalf, HAVI leveraged its large network of existing suppliers and the strong relationships it had established with them through the years to identify capacity, reserve supply and negotiate contracts quickly. HAVI was able to do this with minimal cost impact to customers and in some instances, was able to actually negotiate a better rate due to the increased share of business suppliers secured. Throughout the entire process, HAVI kept its customers informed and responded to their questions and concerns.

As a result of HAVI’s vast connections, long-standing relationships and goodwill with suppliers, and swift efforts in response to a major supplier’s unexpected closing, its QSR customers did not experience any disruption to their businesses and consumers had plenty of straws for their soft drinks.

 

Benefits

No disruption in supply – HAVI leveraged its vast supplier network to find capacity and minimize the potential for disruption in supply for its customers.

  • Minimal cost impacts – HAVI negotiated fair pricing for its customers and helped them avoid significant financial impacts to their business despite the increased demand for capacity and reduced supplier market. The consultants also were able to work with suppliers to negotiate a more favorable cost position for product in the long term.
  • Quick execution – Because of the long-term positive relationships it had cultivated with suppliers, HAVI had a first seat at the table and was able to reserve supply and quickly negotiate contracts on its customers’ behalf.