Ask any procurement or purchasing department employees what their number one goal is and they'd probably say saving money and time. Whether it's for raw materials to make your products or ancillary services to support day-to-day operations, supplier management can be expensive. As everyone likes to save money, consider these tips to cut costs in your supply chain management.
5 Ways Procurement Can Save Time & Money
1. Consolidating Suppliers
Consolidation is a surefire way to save money. A more centralized process of managing suppliers can help reduce costs and save time. For example, consolidating your vending needs into one national account alleviates the hassle your staff has to go through with keeping up with vending machines on site. By consolidating all the vending services into one account, you save time and increase vending revenue as our relationships with suppliers like Coca-Cola and Pepsi allow for better commission rates.
2. Going Digital
Digitalization has connected the world like never before, and not just through social media channels. Purchasing departments would be remiss not to upgrade some of their systems to capitalize on what 'big data' has to offer. There are a variety of digital tools that help managing purchasing and procurement needs easier and more efficient. Such tools can help improve:
- Catalog management
- Inventory management
- Invoice processing
- Purchase order management
- Supplier management
Companies like Tradogram, Procurify, and Officewise are some of the leaders in digital procurement tools. Be sure to properly research the company you are considering to make sure their platform will support your organization's needs.
Procurement can be very complex and costly for larger companies. As a result, many decide to outsource part of their purchasing processes, or even the entire procurement department to reduce overhead and cut costs. For smaller companies, it allows them to take advantage of the expertise of an outsourced procurement team and potentially gain some purchasing power.
4. Streamline Supplier Lifecycle Management
Take a good look at each supplier you use and the process involved with managing them. Are there ways to speed it up? Simplify it? To do this you'll need to analyze hard data, which may take some time. But a little time up front could save some serious cash down the road. This would be an area where digitalization can really help out.
5. Taking Advantage of Big Data Analytics
According to Informatica, big data analytics provides the visibility needed for supply chain officers to make decisions that can reduce costs and improve supplier management.
The right data gives you a full view of the products, raw materials, suppliers and services your company uses, which in turn helps you make more informed decisions...ones that can help save some serious cash.
Big data can also help:
- Drive compliance
- Mitigate risks
- Supplier management
Another key advantage to the successful use of big data is that it can help with negotiations. As knowledge is power, the right information provides leverage when entering negotiations with or selecting a new supplier.
Vending Group consolidates vending services into a single account for hotels, apartment complexes, retail and other businesses with multiple locations across the United States. Contact us to learn more.