Reduce supply chain costs through intelligent procurement

Supply chain optimisation can reduce the cost of a purchased product, step by step. From the current state, a should cost analysis provides a detailed examination of the components and processes involved in manufacturing a product or delivering a service. Costs are split into their constituent elements, from which we are then able to work together to challenge any gaps between current price and should cost (see “Step A” in the diagram below).

Further benefit can then be derived by adopting a could costapproach (“Step B”). This involves working collaboratively with the supply chain on the biggest drivers of cost, adopting business improvement techniques to deliver further, shared value.

This approach can then be repeated on a regular basis across the full spectrum of supply chain products or services. Additionally, comprehensive training can also be provided to your team, equipping them with the knowledge and skills needed to implement and sustain cost-saving strategies in procurement and supply chain management.

Benefits:

• Significant cost reduction through should cost and could cost activities (£10m of cost savings were identified in one organisation, while a typical should cost reduction is 10% in SMEs).
• Strengthened supplier relationships where collaborative improvements have been achieved
• Sustainable savings providing long-term value to your organisation
• An empowered team that’s capable of delivering more value in the future