Outsourced e-procurement can deliver 26% savings and better technology
1 min read
Less than 5% of manufacturers that could benefit from outsourced e-procurement are doing so – and those that are not are missing out on savings that average at 26% of material costs.
So says global procurement services and software firm Vendigital, which recommends a ‘category management’ approach to procurement, pointing not only to value from bulk discounts but best suppliers and best geographies on a per-manufacturer basis.
The firm also suggests that smaller companies are likely to gain biggest advantage since they often have neither the technology or the resources to maximise cost-cutting or improvement opportunities from purchasing.
Says Vendigital director Adrian Griffiths: “The global marketplace is now so complex and changing so quickly that most manufacturers find it well nigh impossible to keep on top. Technology changes, suppliers change, new economies come in – and if they’re only coming to the market occasionally and looking at five or six suppliers they might miss out on all sorts of opportunities.
“So we say, use companies like ourselves that act on behalf of manufacturers as product category managers. We run tenders for companies on a huge range of products and across hundreds of suppliers that are constantly updated around the world – so we are much, much closer to it all.”
And in Vendigital’s case that’s right in manufacturing – everything from PCBs to machine components, tooling, injection mouldings, fabrications, castings and the service sector.
Griffiths reckons that manufacturers of £10m revenues and higher are best advised to consider the approach. The company works on single projects, but prefers to be engaged as a broker, looking after purchasing by proxy.
“Typically we work on a proportion of savings,” he says, and that percentage can be 25—30% depending on complexity and the number of jobs. He says some companies use the services to spearhead cost reduction programmes that can be £5—10 million, while others simply need help finding £500,000 worth of engineering plastic.
“On average we deliver 26% savings, and that can be a lot of money,” he says. “And we can help them find optimum suppliers for their next generation technology products. We’ll go and find development partners, for example.”
