Suppliers play a key role in procurement, and their costs have a big influence on companies’ wellbeing. To start cutting expenses with existing suppliers, businesses should focus on bettering their relationships.
Your suppliers can be a great source of information to understand how your company operates, and how you can remove costs. What makes sense from your perspective might not always make sense from a supplier perspective, and maybe your company has some requirements or structures that add costs for suppliers.
In order to capture valuable feedback from suppliers, consider a survey where you specifically ask them to identify areas of potential to remove costs. In the survey you can ask questions like:
By collecting this feedback from suppliers, you get an ‘idea catalogue’ that you can start analyzing. There will probably be many suggestions that cannot be implemented, but there will also be ideas that you had never thought of that might generate great cost savings.
You can carry out the above survey using e-mails and an Excel-based questionnaire, or some other manual tool or SRM software with the option of creating questionnaires for suppliers.
For select suppliers, it can be necessary to enter a harder renegotiation process to achieve lower pricing.
To get your desired result, you need to be fully prepared with all the data and facts you can get access to. This means you should collect the following:
To collect stakeholder feedback from your organization on the suppliers you want to run a renegotiation process on, you can do the following:
Lars Kuch Pedersen is founder of LeanLinking.
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