KAIZEN™ in Sourcing

From one-size-fits-all negotiation
To new power-based purchasing strategies

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of products' cost is in services and raw materials

100

potential margin increase through purchasing

of supplier monopolies are customer-driven

average processing time for a purchase order

of companies' suppliers are inactive

Mission

If you have the mission of:

• Implementing a structured procurement strategy that captures all cost reduction opportunities

• Reducing cost of stock and transportation without affecting the service level

• Improving quality of materials and services while still optimizing costs

Challenges

Roadblocks impeding you from fully succeeding

Consumer paradigm is shifting from a buyer's market to a seller's market

Balancing the creation of economic and social value to guarantee a circular procurement economy

Develop sourcing expertise in fast-growing emerging economies

Identify saving opportunities when spending is divided across multiple businesses

Aligning the capabilities of the procurement teams with the new demands of purchasing strategies

Increased risk of non-compliance with regulations increases as a result of lack of visibility throughout the supply chain process

Solutions

You need to develop:

Spend Economy

• Create standards that allow for data transparency, helping to identify cost saving opportunities sooner

• Join forces to create a higher negotiation power with suppliers

• Achieve savings as a result of economies of scale

• Reduce company demand from selected suppliers and take full advantage of optimized contracts

• Create standards that allow for data transparency, helping to identify cost saving opportunities sooner

• Join forces to create a higher negotiation power with suppliers

• Achieve savings as a result of economies of scale

• Reduce company demand from selected suppliers and take full advantage of optimized contracts

Negotiation

• Implement standards for systematic and transparent pricing reviews

• Ascertain target prices through different analytical methods, such as cost-based price modelling, cost-regression analysis, linear performance pricing or factor cost analysis

• Create processes to identify potential suppliers, develop tender documents, analyze bids and negotiate with suitable suppliers

• Acknowledge all worldwide supplier opportunities while exposing internal production to competition with the supplier market

• Implement standards for systematic and transparent pricing review

• Ascertain target prices through different analytical methods, such as cost-based price modelling, cost-regression analysis, linear performance pricing or factor cost analysis

• Create processes to identify potential suppliers, develop tender documents, analyze bids and negotiate with suitable suppliers

• Acknowledge all worldwide supplier opportunities while exposing internal production to competition with the supplier market

Re-engineering

• Get involved in product development in order to take part in the discussion on the materials and functionalities to be included

• Break away from single supplier deals with innovative breakthrough initiatives

• Use data analysis and benchmarking to identify potential improvements from a joint effort between procurement, R&D and production teams

• Implement defensive measures to ensure the expected service level and financial outcomes

• Get involved in product development in order to take part in the discussion on the materials and functionalities to be included

• Break away from single supplier deals with innovative breakthrough initiatives

• Use data analysis and benchmarking to identify potential improvements from a joint effort between procurement, R&D and production teams

• Implement defensive measures to ensure the expected service level and financial outcomes

Supply improvement

• Optimize growth and share business risks between buyer and supplier to create a win-win relationship

• Reorganize the value chain and the associated units to eliminate roadblocks and improve visibility

• Minimize costs through collaborative partnerships, such as supplier development, distribution of revenue and costs or joint product development

• Decrease the size of inventories and balance demand through improved forecast reliability

• Target specific short-term performance issues in partnership with suppliers, to improve delivery, quality or cost

• Ensure that the constituents of a product can be reproduced numerous times with the same quality and results

• Eliminate waste of rework and scrap by improving the percentage of "getting it right the first time" percentage

• Synchronize logistics and supply chain activities with production schedules to take advantage of the synergies