Now is the time to review your procurement practices, supply contracts, inventory holdings and methods of sourcing, maintaining and also the locations you source from. With currency fluctuations, previously low cost sources may not be so economical. Taking into account the inventory holdings required, a short-notice local source may allow you to cut inventory safety stocks significantly.
Procurement delivers savings directly to the bottom line. If you save $1 on an item, this directly contributes to profit. Sales need to increase up to $50 to deliver an extra $1 to the bottom line, so in tight economic times it makes sense to focus on Procurement at least as one of your areas of attention.
Attacking the full supply chain is a complex process. Consider conducting a quick diagnostic to focus your staff on the key areas of delivery. Their current job has not suddenly disappeared, so they will only be able to focus some of their effort on the task. Make sure it is on the right tasks.
You could approach either contractors or consultants to assist. Nine Hills Consulting work specifically in this area and can assist with the diagnostic, conducting cost saving activities, providing axcess to agencies that will manage indirect categories to allow your staff to focus where the real money is, or simply providing staff with training or tools to assist.
Our aim is to dekiver value to your business well beyond any cost. Keeping our clients in business and exceeding the performance of their competitors seems obvious. Strangely, some businesses can't see this and think consultants will simply take the fees, deliver little and move on.
Nine Hills are keen to agree an outcome and guarantee it. Satisfaction depends on gaining a clear understanding, then delivering it.
Not convinced? Contact us and put us to the test.
Sunday, November 9, 2008
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