3 Procurement Tips for Fabricators & Manufacturers

1. Consolidate Your Supplier List

Slimming down your supplier list can seem like a daunting, risky task, but there are a few tips that can help you evaluate and consolidate your vendors and get great results. When evaluating your suppliers, it’s important to be able to use accurate side-by-side comparisons. Scorecards, supplier-generated reporting and other data can easily be compared, giving you a clear, objective picture of supplier performance. Before you consolidate suppliers, set expectations and be clear about your needs to ensure that your suppliers can meet your requirements and set service level agreements accordingly.

Once you’ve started consolidating your supplier base, routine reviews of your suppliers and regular communication with your suppliers’ point of contact can generate the data needed to give you clearer insight into how well the consolidation is working. It is also important to consider the impact vendor consolidation has on your end customers.  Thorough, proactive communication can outline the benefits of consolidation while also opening up the lines of communication for ongoing feedback from your user community.

2. Consolidate Purchase Orders

By consolidating purchase requisition lines from multiple purchase requisitions, you can increase your negotiating power with your vendors. As a result, you may be able to achieve better pricing, lower shipping and handling costs, and reduce overhead costs. During the approval process, purchase requisitions should be evaluated against purchasing rules that you define. Purchase requisitions should then be either automatically processed into purchase orders, or held for manual processing and demand consolidation.

3. Manage Logistics (On-Time Delivery)

Consider partnering with a distributor to help you manage on-time delivery and carry inventory on your behalf. While ordering directly from a manufacturer may save money upfront (depending on industry pricing agreements), it may cost you when it comes to managing inventory and logistics. By partnering with a distributor you are able outsource expediting and inventory management. Some of the more common inventory management services include dock to stock, bar coding, off site bins, consignment inventory and kitting. These services can work in conjunction with an auto replenishment services or as a stand-alone services.

Ready To Optimize Your Procurement Process By Implementing One Of These Strategies?

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