Saving on procurement
1 min read
Manufacturing firms could be making hefty savings on their procurement budgets through fostering better supplier relationships and managing costs, according to some new calculations published today.
Research finds that UK plc is wasting over £65 billion pounds a year
on mismanaged expenditure
Research carried out by the UK procurement specialist BuyingTeam shows that manufacturing companies listed in the FTSE 250 index alone could be saving over £1 billion. The collective cash spend of the FTSE 250’s manufacturing companies was over £18 billion in 2008, it says, and some £6 billion of this was allocated to the purchase of indirect goods and services (needed to run a company, but not sold on by the company, e.g. utilities, marketing, technology, printing etc).
Further improving supplier relationships could have saved over £1.06 billion, says BuyingTeam. The company’s Guy Strafford (pictured) recommends that FDs and those in charge of procurement should get a clear view of all company expenditure; see whether there are multiple suppliers for the same product or service; check when contracts with suppliers were last reviewed or renewed; ask how suppliers are used, are if they needed; ensure close management of suppliers continues after the contract has started.
