In the procurement industry there are many ways to save. There are three main areas to look into when assessing how to save costs.

There are three main methods: purchase demand management, supply base management and total cost management.

The easiest way to save costs is to decrease the demand. This can be done by:

Reducing consumption – Every organization has goods that they could do without. The business needs to see whether they actually need the product. This often arises in times of economic growth and stops when the situation becomes less positive.

Improvement of specification – Technicians are striving for perfection and find the nicest product, often the most expensive solution, but another less expensive option would be suitable.

The supply side is associated with procurement. It is how to use suppliers to save costs.

Restructuring supplier relationships – Better relationships with suppliers may result in better quality products. It is possible to gain additional cost advantages by intensifying the collaboration with suppliers, starting up partnerships and striving for a sustained cooperation.

Increase competition– This is the opposite of restructuring supplier relationships. The competition between potential suppliers is stirred up to achieve favorable conditions.

Finally, decrease of demand or reducing direct purchase expenses lead to savings.

Optimization of total supply chain costs – This has expanded enormously over the last 30 years, it saves a lot of money.

  • Reduction of transaction costs – Costs that may easily be overlooked are the costs related to the process of ordering, receiving and paying for purchases.

Global Synergy Resources has a cost orientated approach allied with international quality standards. Our team sourcing strategy enables us to source effectively. Meeting the client’s needs and making our services accessible globally.

By Simrah Ahmad , Assistant Accountant, Global Synergy Resources – London, 31/07/17