Across many industries globally, consolidating suppliers within specific supply categories is a proven strategy to concentrate buying power and reduce purchase prices. By simplifying and automating interactions with preferred suppliers, procurement and purchasing teams can more effectively work supplier relationships beyond just cost savings, to include support for more strategic enterprise imperatives.
The challenges and issues large organisations face today managing their supplier base can amount to an increase in time, effort and workload to ensure these relationships are maintained and built upon in order to get the best possible value and service.
Consolidating your supplier base can be a very worthwhile objective and could provide organisations with increased service & quality levels, while reducing procurement and operating expenses as well as soft costs. As with many things in business, there are risks as well as benefits to supplier consolidation. Perceived risks such as supplier inflexibility, vendor lock-in or suppliers claiming as a “one stop shop” when they clearly aren’t, can be eliminated through well documented procurement selection processes.
Reduced Purchasing Soft Costs – By dealing with fewer suppliers, the billing process will be clearer, the control and visibility over your company’s purchasing will be increased and orders will be easier to manage and track; resulting in less time and administration dealing with multiple orders, deliveries and invoices – leaving your team to focus on your business
Increased Service & Support – Consolidating your products and services with a single source supplier will result in better relationships and improved service levels. Successful key account management from within your suppliers and regular supplier business reviews provides an increase in cost reduction initiatives and improvements.
Improved Quality – once you have streamlined your supplier base and partnered with a single supplier, they will likely improve quality to minimise the risk of losing your business.
Reduced Procurement and Supplier Management Costs – While reduced product or service price’s represents the largest source of hard cost savings from supplier consolidation, reduced process cost (i.e., increased efficiency) may be the largest opportunity. With fewer suppliers, the number of separate transactions falls, as does the amount of time it takes to manage those suppliers.
Large companies across Australia and New Zealand have strategically partnered with RWW Group to reduce their supplier base and consolidate essential business requirements. RWW Group specialise in cost aggregation giving businesses the opportunity to save not only in the direct cost of goods ( production consolidation) but through vendor consolidation across multiple indirect spend categories such as;
Call RWW Group on 1800637098 and ask us how we can help you reduce your overall spend throughout the safety and apparel categories.