An audit of your situation
In order to understand your company’s situation, the way you currently buy your raw materials, products and services, we need analyse your purchases in order to determine the best set of actions to create value for your company.
It is necessary to understand the dynamics of what you buy in order to determine the Total Cost of Ownership (TCO) of each item. Based on our expertise, we will assess if these TCOs can be reduced and therefore generate savings for your company.
Some companies concentrate their buying effort on direct spends because their cost impact directly on the finished product/service. However, indirect spends can prove to be costly and there is an opportunity for savings if correctly dealt with.
The analysis of your supplier base will enable us to establish:
- Who are your main suppliers
- How many historical suppliers you have
- If you put all your eggs in the same basket or do you have several suppliers for one supply
- If you have a lot of suppliers that you trade little with
- If there is space for new entrants
The expression of certain needs prompt the act of buying. In SMEs, people having a need are quite often the ones that order directly the solution to fulfill that need. A few things to consider as a business owner:
- You may have several people in your company who have the same need but are not necessary aware that they share that need. Their buying power is diluted into several purchase orders and your company may be spending more money that it should.
- How efficient is the sourcing of the solution? Have you considered all options on the market? Do you need a luxury car or a basic one can do the office ?
- Do you have specifications in place to document that need? What happens when the person with the knowledge moves on?
and now the strategy
We have now a solid understanding of your spends, your supplier base and your needs. This will give us some clues as to where we should find potential savings and how to improve the way you operate.