10 WAYS TO BOOST YOUR COMPANY’S VALUE: Practice #3: Re-evaluate your supply chain

10 WAYS TO BOOST YOUR COMPANY’S VALUE: Practice #3: Re-evaluate your supply chain

Another way to increase efficiency and save money is by analyzing supply chain purchases and implementing an e-procurement solution. E-Procurement systems have matured in the last decade and today offer many ways to connect in groups and save money on volume purchasing.

Joining a volume purchasing organization can reduce raw material costs, streamline purchase processing costs, and reduce or eliminate “rough spenders” in your company by electronically restricting their purchases to pre-approved vendors.

If you’re in the Food & Bev industry, for example, Foodbuy manages over $5 billion in volume purchases for the foodservice and grocery industry and passes the savings on to its members. Other industry trade groups do the same. You can find specific volume purchasing opportunities in most industries nationwide.

Lastly, the importance of key-input supplier relationships cannot be overstated. Most firms depend on a single key-input supplier as the lifeline in their supply chain. If that supplier goes under or raises prices or treats you poorly, however, there’s little you can do. The consequences can ruin your business and your hard earned customer relationships quickly.

To avoid this, you must find and nurture more than one key-input supplier. Go to trade shows in your industry. There you will likely find eager alternative key-input suppliers. Work with them, explain what you’re up to and work out a trial period.  Investing in secondary key-input supplier as a lifeline back-up within your supply chain is a best practice worth every penny when the time comes.

In part 4 of this series I’ll talk about doing an IT system checkup.