Maintaining the right deal
Getting the right deal is only the beginning.
Ongoing Contract Management and Supplier Relationship Management are vital to ensure value is extracted from suppliers. There are a number of factors which influence obtaining ongoing value from well negotiated deals.
There is usually some work to do internally; individuals are sometimes responsible for off-contract purchasing, or ‘maverick spend’. It is easy to deviate from the straight and narrow, so ongoing analysis of spending patterns and anomalies can help to embed smarter spending habits into the workforce.
Proper provision of policy can help. We work with stakeholders to strengthen market understanding and demonstrate best practice processes that will remain for the long term.
Our experts can help with embedding processes and providing guidelines for responsible employees, many of whom often have no formal purchasing training and had buying latched onto their existing responsibilities.
We use analytic audits to ensure suppliers are kept accountable during the contract period and this requires time and resources that most organisations simply do not have.
“According to the GEODIS 2017 Supply Chain Worldwide Survey, Only 6% of firms have achieved supply chain visibility, yet it’s a top 3 priority for them. 7 out of 10 see their supply chains as either very or extremely complex.”
There are plenty of tactics that suppliers can use to reclaim margin lost during negotiations, but even without those being deployed, there are many other reasons why cost can go up over the course of a contract and identified savings targets are not met.
Either way, there are measurable benefits that come from engaging with suppliers at all levels of your business in a new way. True partnership – sharing your objectives and aspirations with suppliers – can reap rewards. By co-operating with suppliers, rather than battling with them, you can both enjoy sustainable benefits. We’ve seen numerous examples over the years.
By sharing an ambition or new requirement, you can work with suppliers to develop new product and service offerings, boosting their business and providing a solution for yours. In the past, most organisations have worked to develop supplier relationships at some level. In the current climate and in an unpredictable future looking at these issues in all areas of cost becomes a necessity.
For more information, please contact us.