18 Jan Supplier Management Cost Reduction Tips
Supplier management can prove to be very expensive. Companies can easily save a significant amount of money annually in supplier spend by effectively leveraging supplier data quality acquired from trusted sources. Cost-reduction, spend analytics and cost-efficiency are some of the topmost priorities in procurement and SCM (supply chain management).
Why you need well-connected data
Current day supply chains are very complex and Chief Supply Chain Officers have to adopt various methods to achieve cost reduction. Data powers good supply chain visibility, which makes it a prerequisite for increasing ROI and successful supplier management cost reduction. Consistent, clean and well-connected data is needed to fuel:
- The supply chain
- Analytical and operational applications
And achieve a 360 ° view of:
- Raw materials
- Suppliers and services
Based on this, businesses are able to align tasks, make better-informed decisions, and find new ways to drastically reduce costs. Here are some data strategies that are effective in reducing supplier spend, logistics & procurement costs:
#1 Data can boost your business’ negotiation capabilities
You need access to a consolidated view (in real time) of all the vendors if you want to achieve noticeable cost reductions in procurement. You need a very good understanding of all spend and relationships with suppliers across your business in order to negotiate pricing and payment terms. You should consider using an application that’s fuelled by master data application for supplier relationship management. This gives you the chance to uncover the hidden costs that connect all the supplier master data in a single app.
#2 Streamline supplier lifecycle management
You can achieve significant cost reduction by eliminating business overheads needed to manage suppliers lifecycles, assess and analyse their performance and information. Automate your SRM & workflows, as this will simplify and speed-up processes such as supplier on-boarding. The supplier lifecycle management application you use should have a supplier self-service portal. This automatically gives your supplier management team more time to drive innovation as well as strengthen important business relationships with various strategic suppliers.
#3 Automate exchange of product data, with trading partners
For manufacturers, retailers and distributors, master-data fuelled product information management becomes the foundation for successful multi-channel commerce. It provides complete and accurate product data across various channels; which in turn lead to higher conversions in E-commerce, faster product launches, and higher margins. Since this considerably reduces costs and manual efforts, it also helps streamline processes such as managing, updating and sharing of product information with your trading partners.
#4 Focus on maintaining high-quality data
Maintain accuracy of supplier, raw material, contact, and product-related data. You need to have an accurate view of all your supply chain functions in order to make appropriate decisions, avoid manual workload and successfully manage relationships. This is why data quality guidelines should be part and parcel of all business applications.
#5 Focus on increasing efficiency
Use big data analytics in your business’ supply chain. It can boost the performance of your supply chain performance in numerous ways and significantly improve supply chain efficiency.
Cost savings also translates into saving time; and you and your team can utilise this time to strengthen relationships with existing suppliers, explore new markets and products as well as drive and develop new and innovative business ideas.
For effective and sustainable cost reductions & efficiencies that will increase your bottom line, contact the experts at Benchmark Cost Solutions at this number – 1300 170 585. If you prefer, you can also request a call back or write to us at this email address.
Thanks for reading,
Benchmark Cost Solutions Team
1300 170 585