Ways of cost reduction:
- Be aware of your suppliers – review their discounts and prices periodically, in order to get the most out of their offers. You must have an overview of all vendors if you want to achieve cost reductions in procurement.
- Centralise procurement – The rationalised supplier base under a centralised procurement strategy leads to increased competition among suppliers and reduced supply costs. It also helps in strategic supplier relationship management.
- Using e-procurement technology – This costs money at first, but by speeding up and simplifying purchasing, savings should be made.