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Reporting on CO2 and sustainability is essential, but let's be clear—it won’t save the planet. Only action will, and though not all agree to whether or not we are at a tipping point for saving the planet, then all of us, however, can agree that “doing something, is better than doing nothing.”. Doing something for ... Read more
Extending supplier payment terms is not merely a procurement strategy but also a viable cash flow optimization tactic that involves close collaboration between procurement and finance departments. By deferring cash outflows, organizations can harness an immediate buffer in their financial positioning, granting them breathing room in challenging times. This strategy, while providing short-term relief, also ... Read more
It’s a foundational business principle: “What gets measured, gets managed.” Yet, when it comes to the realm of procurement, many organizations either miss out on implementing KPIs altogether or get bogged down in overly complex metrics that aren’t immediately actionable. Here’s the catch - in the face of urgent cost pressures, there’s no luxury of ... Read more
In the quest for rapid cost optimization, timing is everything. While the importance of procurement in long-term projects is undeniable, its early intervention in short-term, large projects and swift R&D initiatives is equally pivotal. When procurement teams are looped in at the inception stages of these projects, they bring a nuanced understanding of the market, ... Read more
In today’s dynamic business landscape, striking a balance between market presence and operational efficiency is pivotal. A diverse product range can capture varied market segments, but the behind-the-scenes challenges of sourcing components for these products can strain resources and costs. Delving deeper, every hard-to-procure component not only pushes up your expenses but potentially disrupts your ... Read more
In an age where efficiency drives profit, mastering tail end spend has become an essential strategy for optimal procurement. Through a combination of aggregator strategies, digital tools, and the adept use of integrators, businesses can elevate their procurement game. Here’s a closer look: Leverage Aggregator Suppliers Across Categories: By pooling demand across various categories, wholesalers ... Read more
In the rapidly evolving procurement landscape, e-auctions have emerged as a powerful tool to ensure competitive pricing, particularly for non-critical categories. While many are familiar with the concept of e-auctions, few are leveraging its full potential, especially when it comes to simple, one-off sourcing needs. The traditional approach to e-auctions often involves a company owning ... Read more
In today’s complex business environment, it’s crucial to strike a balance between empowerment and control when it comes to financial decisions. One significant way to achieve this is by revisiting and recalibrating Procura rights assigned to employees. Procura rights essentially dictate the level of financial authority an employee possesses, enabling them to make purchases or ... Read more
Transparency in business operations, especially in the realm of cost management, is much more than a simple buzzword; it serves as a pivotal framework for informed decision-making. In our fast-evolving corporate landscape, a clear and detailed insight into expenses isn’t a luxury, but a necessity. However, having raw numbers on a spreadsheet or a dashboard ... Read more
Maverick buying — that unregulated, off-contract purchasing — continues to be a bane for many organizations. It’s an age-old challenge where purchases bypass established procurement channels, often resulting in inefficiencies and unnecessary expenditures. While the initial impulse may be to reprimand the erring business units, this approach rarely rectifies the root of the issue. It’s ... Read more
In an era of rapid technological advancements, it remains a peculiar anomaly that several businesses are still tethered to the age-old methods of paper invoices or the roundabout practice of printing PDFs only to scan them back into their financial systems. This method is not just inefficient but represents a tangible drain on resources and ... Read more
While buying in smaller quantities may seem convenient, it isn’t always the most cost-efficient approach. Engaging in a transparent conversation with suppliers about ideal order quantities—beyond just minimum requirements—can offer illuminating insights. Consider the experience of a certain company that procured product labels based on their immediate production needs, usually around 10,000 labels at once. ... Read more
When shaping your procurement strategies, tapping into the existing market norms can prove to be a goldmine for cost optimization. The rationale is straightforward: acquire what suppliers are already producing and selling extensively to their clientele. This doesn’t mean compromising on quality or specific needs; rather, it’s about aligning your demands with the prevailing supply. ... Read more
Engaging proactively with your top-tier suppliers, especially those with significant spend, can lead to transformative results. Delve into candid conversations about how swift changes in your procurement behavior can drastically reduce the cost burdens they face. More often than not, the extra costs arise from nuances in purchasing patterns - like non-standard specifications, unconventional SKU ... Read more
In the ever-evolving realm of procurement, the art of negotiation remains timeless. However, the present emphasis is on expeditious negotiations, targeting those categories that have been overlooked or undervalued for some time. Start by pinpointing medium to high spending categories that aren’t deemed business-critical, particularly those with a myriad of suppliers or those untouched by ... Read more
Shifting a significant portion of tail-end spending towards aggregator-style suppliers, such as wholesalers, can be an effective strategy to simplify procurement processes. On the surface, prices offered by these aggregators might appear marginally higher. However, when considering the administrative and operational costs of managing numerous individual suppliers, coupled with the intricacies of multiple purchase order ... Read more
The bedrock of streamlined financial operations is consistency, especially when it comes to payment terms. If an invoice doesn’t correspond to an active contract, companies should rigorously apply their pre-established default payment terms. It may come as a surprise, but in numerous organizations, these standard payment terms aren’t always strictly enforced for non-contracted invoices. This ... Read more
Evaluating inventory levels, particularly for non-critical SKUs, is a pragmatic step that doesn’t demand exorbitant resources. Begin by comparing historical consumption patterns against current stock levels and the forecasted inflow of goods. The goal is to recalibrate stock levels to the lowest feasible threshold. In an age where businesses need to be agile and capital ... Read more
Contract compliance pivots around human behavior, making people instrumental to its success. Before diving deep into metrics and audits, it’s imperative to ensure the basic accessibility of contracts. Can users readily locate and reference them? Are they able to seamlessly generate purchase orders based on these contracts? Addressing such fundamental questions is pivotal to the ... Read more
Consolidating suppliers is a strategic move that many enterprises underestimate. By reducing the total number of active suppliers and reallocating the procurement to existing partners, businesses can bolster their negotiating power, ensuring better commercial terms. Additionally, this shift often results in enhanced adherence to established procurement protocols and existing contract terms as the complexities of ... Read more
Becoming a founder of an ambitious SAAS company in the highly competitive procurement space is not a straight line. Find out here what it takes and why the journey was started in the first place. Link to our Free Top Advice for Rapid Cost Reductions The interview is part of our "building in public" path, ... Read more
In the world of procurement, not all expenses are created equal. Prioritizing strategic costs is pivotal for SMEs keen on optimizing their budget. One profound strategy lies in delineating essential from non-essential purchases and pivoting towards reusing assets when practical. For instance, before acquiring new IT equipment, one might reconsider assets in storage or extend ... Read more
The primary distinction between basic procurement activities and high-impact professional procurement teams is the teams ability to look beyond simply pricing and base their decision on data. With a broader-than-price perspective, along with expertise of how to analyze facts, identify opportunities, and achieve long-term cost reductions with business counterparts procurement can move from “the too-late ... Read more
Revolutionize your procurement process with Artificial Intelligence. From automating routine tasks to enhancing strategic decision-making, discover how AI is transforming procurement into a more efficient and insightful function. Many times, procurement is viewed as "just" a back office cost center, with its employees being so overburdened with operational duties that they fail to fulfill their ... Read more
Two entangled threads that stand out in the complicated fabric of business operations are supply chain visibility and supplier performance management. They both contribute to the supply network's overall success and resilience. Despite their apparent contrasts, these two concepts are inextricably linked and function in tandem to foster resilience, efficiency, and competitive advantage. Transparency ... Read more
Supplier Performance Management (SPM) becomes essential in the quest for a profitable and efficient supply chain. Your supply chain's efficiency depends on how well your suppliers perform, thus it's critical that you carefully control and monitor their business practices plus leverage these insights for improving your supply delivery to your clients. The Importance of Performance ... Read more
The effectiveness and efficiency of your supply chain play a big role in determining how successful your firm is in the current global economy. However, because modern supply chains are global, dynamic and complex, maintaining operational excellence and cost-effectiveness can be a difficult task adding layers of process & people within your organization to manage ... Read more
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Contact us anytime for anything relating to cost! If our solution can help then that’s great – but if you just need general advice and guidance on how to improve your company cost performance – contact us anyway and we will gladly support with free guidance!
