Buyers are ordering too many different kinds of products ultimately increasing cost.
Before going into a contract, buyer should analyze the consumption pattern of products. This includes analyzing durability and end-user compatibility of the product used. In this analysis the focus should be on standardization of the products by using one brand, one kind and optimum priced product. This would not only reduce the ordering cost but buyers can ask for more discounts by using the products produced by one manufacturer.
Buyers with the help of suppliers should set a systematic cost-effective ordering schedule.
Buyers can optimize their spend by 4 – 5% by setting systematic ordering schedule. This should be done taking into considerations buyer’s location and demand. The ordering schedule may vary from country to country or location to location. It is important to see the ordering history of the site before setting the ordering schedule of a particular location
Buyers should have a clear understanding of the low-cost products available and should not end up paying more.
Buyers should have clear understanding on the price difference of other similar products manufactured by other manufacturers. As an emerging practice, buyers should compare rates quoted by different suppliers providing similar products to understand the overall price difference. This price benchmarking should be done considering factors such as overall spend, volume procured and the type of products being ordered. Then, engagement with the best fit supplier should be decided.
Suppliers provide self-branded products at a price similar to the products of other OEMs.
Buyers can ask for more discounts from the suppliers while procuring self-branded products. Increasing the use of self-branded products can bring significant cost savings. Using products like remanufactured toner cartridges instead of the OEM can also fetch more cut in spend to the buyer.
Suppliers are increasing their capabilities by providing more services such as break-room, clean-room and IT services.
Buyers can leverage suppliers for such additional services which will enable them to consolidate their supplier base. This would also lead to increase in the buyer power. The idea is more in the bucket, better the deal. Buyers not only get a better deal price wise but also have a centralized procurement process. It is a win-win for both the supplier and buyer.
Suppliers are regularly pushing the ‘green’ / ‘eco-friendly’ products to the buyer.
Though there has been an increasing preference for green products, it is important to know at what cost green products should be procured and in what way they are better than the normal ones. Above all, as these products cost more, buyers should be vigilant and should know if these products are really required.
With increase in product portfolio buyers need to have a robust office supply sourcing strategy to achieve continuous cost savings. Buyers can achieve this through continuous monitoring of the products used, analyzing spend and keeping a regular check on the products pricing. Emphasis should also be given to track the new products and adding them to the product portfolio whenever required, which can further help in cost reduction.