Through a combination of aggregator strategies, digital tools, and the adept use of integrators, businesses can elevate their procurement game. Here’s a closer look:
Leverage Aggregator Suppliers Across Categories: By pooling demand across various categories, wholesalers or aggregator suppliers offer a pathway to economies of scale. This not only reduces unit prices but also provides a singular, more streamlined point of contact, simplifying supply chain processes.
Implement Advanced Digital Monitoring Tools: Harness the power of digital tools that constantly oversee tail spend. Equipped with advanced algorithms, these tools provide a comprehensive view of your expenditure, flagging potential areas for savings. Intelligent notifications alert you when spend reaches certain thresholds, suggesting areas ripe for negotiation.
Adopt Payment Suppliers for Minor Purchases: For those instances where negotiation isn’t viable with smaller suppliers, payment suppliers, like credit cards, come to the rescue. They might not reduce item costs directly, but they do offer extended payment terms, often up to 30 days. This assists in more effective cash flow management and grants flexibility in capital allocation.
Engage with Integrator Service Providers: Some companies have mastered the art of being a one-stop solution for a firm’s non-critical items. Think of them as a bridge between your company and a plethora of suppliers. For example, if a company finds a product from Supplier X, they simply relay this to the integrator. The integrator then either manages the payment to this one-off supplier, or they might even source the product for you, comparing offers and guiding your buying decision. The beauty of this is twofold: they implement your procurement policy, and you’re left processing a singular invoice from a trusted entity – the integrator.
See our top 20 free advice for rapidly reducing supplier costs