Collaborative Procurement & Supply Consolidation

COLLECTIVE

According to recent figures published by commercial law firm Bond Dickinson, although the volume of corporate deals has fallen post-Brexit, large companies spent £21bn on collaboration. This compares with an official figure of just £16bn on research and development.

Collaborative procurement is when two or more organisations work together to engage in procurement activities in order to cut costs and enable savings through efficiencies. In addition to the obvious benefits, organisations can greatly improve the quality of goods or services being sought, in addition to obtaining better lead times.

Many organisations already consolidated their procurement, this leads to organisations ensuring their supply chain is more streamlined and cost-effective. Grouping the purchases made over a year to the most opportune times & overlaying your purchase needs and times with other organsations automatically will naturally provide additional efficiencies.

This can be achieved by creating or joining Combined Buying Groups. Examples areas of common buying groups:

  • Telecommunications
  • Ingredients
  • Packaging
  • Vehicle Fuel
  • Workwear
  • Building Materials
  • Medical Equipment
  • Facilities Management
  • Food/Drinks

In addition to lowering your resource needs, consolidating your supply chain increases your ability to source more products, with the biggest benefit being the reduction in capital cost and supply chain expense.

It’s important to break down these costs into their appropriate categories:

Purchased Costs – Consolidating and reducing the number of your suppliers for your total purchased costs & implementing strategic sourcing methods to encourage competition, you lower your costs by increasing your buying power.

Process Costs – As you reduce suppliers the number of transactions reduce and so the associated time in managing and supporting suppliers reduces.

While the benefits of consolidated procurement are clear, implementing and managing them can be challenging.

Implementing our sourcing portal for all employees to make their procurement related activities through even for emergency purchasing needs even when a purchase order has not been approved will greatly reduce wasted time with purchase reconciliation for any organisation.

We are working hard to implement our Collaboration, Buying Group & Supplier Consolidation solutions.

In the meantime contact us for any inquiries.

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