© 2011 Sixhills Consulting LtdSavings Opportunities - Case ExamplesSavings opportunities can be identified across three broad areas based on inefficiencies in each•Original product specification are not challenged•Supplier economics and drivers of cost are not explored•Suppliers are not incentivised to achieve win/wins •Buyers do not share vendor productivity gains•There is high corporate inertia and low perceived opportunity to reduce costs or improve processes•Risk taking / innovation is not rewarded•Unreconstructed purchasing processes perpetuate vendor/buyer inefficiencies•Use of standardised processes and technologies is limited•New technologies and practices are not implemented, or are implemented poorly•Buyers restrict themselves to familiar vendors•Vendor relationships are comfortable, cordial and often personal•Buying decisions are incremental rather than zero-based•Many external purchases are not formally bought; they just happen•Pricing is opaque•Other potential vendors are seldom identified•Actual unit costs are not, or cannot be calculated •Non-negotiated extras are addedExamples of Purchasing InefficienciesProductPriceProcessSavings OpportunitiesAggressive SourcingP5
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