Savings not always generated at the supplier. Look inside!

| 0 Comments

 

AlanLow_2013.jpgAlmost 20 years’ experience benchmarking goods and services has taught Alan Low, CEO of Purchasing Index (PI), that improving efficiencies and generating savings often has nothing to do with an arrangement with a supplier. He spoke to SmartProcurement about other avenues that lead to great savings.


SmartProcurement If savings can’t be made with the supplier, what other savings opportunities might apply?


Alan It’s hard for organisations to make sustainable savings without changing behaviour and/or process. That normally involves the whole organisation. Take domestic air travel, for instance; the real savings opportunities lie in persuading travellers to book further in advance and to use low-cost carriers. Both of these rely on employees changing behaviour. Some of our clients are collaborating with their Travel Management Companies to assist in changing culture and behaviour, but the savings will be made internally.


SmartProcurement Have you noticed any interesting market trends in recent years?

 

PCindices_against_USDollar_Euro_indices.pngAlan We have. Take PCs, for example; recent benchmark reports have shown users expanding their choices to Tier 2 suppliers (Toshiba and Mecer) and away from the traditional Tier 1 suppliers (Dell, HP and Lenovo). The PC market in RSA is very competitive and as we track the average movements in desktop and laptop prices, we can see that they bear no relationship with the movement in the Rand/Dollar and Rand/Euro exchange rates, as the graph alongside shows. And this is as PC model performance improves quarter on quarter.


In our experience global contracts often disadvantage some part of the organisation. One needs to have independent comparisons to be sure that these agreements still provide the value their originators believed they would.


Another good example would be staff catering, where organisations have realised that good quality catering can be seen by staff as an employer differentiator. More organisations are trying to influence the eating habits of their staff by introducing more healthy and nutritionally-balanced options to the menu and several of our benchmarking clients use the services of a dietician to assist, for instance, diabetic staff to eat more appropriately. There is a growing realisation that diet influences staff productivity; and this doesn’t necessarily have to cost more.


SmartProcurement How can benchmarking help procurement professionals?


Alan Procurement departments have to win the hearts and minds of their internal clients; no organisation gives central procurement a mandate these days. Benchmarking provides procurement and the whole organisation with opportunities to improve efficiencies and make savings. As purchasing professionals have to be good marketers, so benchmarking provides independent validation of the value of procurement and reinforces the need for change in many spend areas, highlighting, among other things, the cost of personal and/or technical preference.


PI provides detailed, anonymous comparisons between participating organisations, not just on price and costs but also on how goods or services are used within each organisation. It covers such matters as service level agreements, coverage, utilisation and much more. It gives each participant a comprehensive view on improving efficiencies and where they can make savings.

Leave a comment


SmartProcurement Newsletter
X

Please enter your details below to receive the SmartProcurement Newsletter for FREE on a regular basis.

As part of the SmartProcurement Newsletter you will be receiving World Class Procurement News, Tools, Tips, Tactics, Procurement Training updates, Upcoming Events, and the latest Procurement Career Openings.

* Email Address:
* Title:
* First Name:
* Surname:
* Company:
  Position:
* Country:
* Public / Private:

 

 

Career opportunites

Commodity Manager

  • <500 000 Commodities Permanent Procurement Management Western Cape
R700 000 - R850 000 per annum,Location: Western ...More

National Supply Chain Manager

  • <500 000 Across borders Permanent Procurement Management Supply Chain
R750 000 - R1 000 000 per annum,Location: ...More

Industrial Engineer

  • <500 000 >500 000 Industrial Engineer Operations, Planning & Inventory Permanent Western Cape
R450 000- R500 000 CTC per annum,Location: Western ...More

Commodity Manager

  • <500 000 Commodities Gauteng Permanent Procurement Management
Category: Procurement,Salary: R700 000 - R800 000 per ...More

Supply Chain Manager

  • <500 000 Gauteng Permanent Procurement Management Supply Chain
Category: Consulting,Salary: R750 000 - R800 000 CTC ...More

Logistics Manager

  • <500 000 Across borders Logistics & Warehousing Permanent Procurement Management
Category: Logistics,Salary: R900 000 - R1 000 000 ...More

Demand Planner

  • <500 000 Gauteng Operations, Planning & Inventory Permanent Projects / Category Management
Area of Specialisation: Planning,Salary: R500 000 - R650 ...More

Industrial Engineer

  • <500 000 Analyst Gauteng Industrial Engineer Permanent
R800 000 - R850 000 CTC per annum.Location: ...More

Security Manager

  • <500 000 Analyst Gauteng Permanent Procurement Officer / Specialist
(Total Cost to Company R350K - R550K).This is ...More

Operations Manager

  • <500 000 Gauteng Operations, Planning & Inventory Permanent Projects / Category Management
(Total Cost to Company R650k - R750k) excluding

Commodity Manager Raw Materials

  • <500 000 Commodities Gauteng Permanent Strategic Sourcing
(Total Cost to Company R980k - R800k) excluding ...More

Commodity Manager Logistics

  • <500 000 Commodities Gauteng Logistics & Warehousing Permanent
(Total Cost to Company R1mil - R900k).Industry: Engineering

Procurement Consultant

  • <500 000 Gauteng Permanent Procurement Consultant Procurement Management
(Total Cost To Company 550K - 450K) includes ...More

Commodity Manager MRO &CAPEX

  • <500 000 Commodities Gauteng Permanent Projects / Category Management
(Total Cost To Company 900k - 750k) includes ...More

Commodity Specialist - IT Hardware and Software

  • <500 000 Commodities Gauteng Logistics & Warehousing Permanent
(Total Cost to Company R550k - R650k) including

Sourcing Specialist

  • <500 000 Gauteng Permanent Procurement Officer / Specialist Strategic Sourcing
(Total Cost to Company 500k - 650k)Experience and ...More

Supply Chain Manager

  • <500 000 Gauteng Permanent Procurement Management Supply Chain
(Total Cost to Company R850k - R1mil) includes

Senior Consultant

  • <500 000 Gauteng Permanent Procurement Consultant Strategic Sourcing
(Total Cost To Company 500k - R750k) includes ...More

I.T Procurement Specialist

  • <500 000 Gauteng Permanent Procurement Management Procurement Officer / Specialist
(Total Cost to Company R350k - R450k) includes

Logistics Manager

  • <500 000 Gauteng Logistics & Warehousing Permanent Procurement Management
(Total Cost to Company R700k - R550k) Including ...More