London, UK, Thursday May 26 2009: To fully lower costs in the current economic downturn, companies must challenge their suppliers but they must do it strategically, say procurement consultants Efficio.
In the latest Viewpoint article, Efficio Vice President Toby Munyard says companies must “seize the day” and review all areas of spend from support services to factory consumables to bought-in components. “There must be no sacred cows,” he writes. “There is no better opportunity for buyers to take advantage of lower costs and ensure they are getting the best value for money in what has become an intensely competitive market.”
However, he also warns that procurement departments must not fall into the trap of only “banging fists on the table” to drive costs down. Price reductions alone will not deliver the real benefits available but will expose companies to increased supply risks, he says. Now is the time for procurement to think both quickly and strategically.
Munyard suggests four key action points for procurement executives: un-bundle all areas of spend to get to the “should price”, ensure all “sourcing levers” are fully leveraged, ensure that short-term reductions do not affect suppliers’ longer-term financial stability, and invest in your team to create longer-term sustainability.
“Never will there be another opportunity so strong to achieve true value,” says Munyard. “This is a unique window where buyers can do so much more than simply demand reductions. It is an opportunity to manage your complete supply base and organise procurement so that this short-term effort does not go to waste and can be used for long-term gain.”
Notes to editors
Seizing the Day - Making the most of supplier competition whilst safeguarding your future can be downloaded from the Efficio website at www.efficioconsulting.com
Efficio is a results-focused procurement consultancy, with a track record of helping leading organisations achieve more value from their procurement. Comprised of experienced professionals with a blue-chip consultancy heritage, Efficio combines the credentials of a top tier firm, with the depth of expertise of a flexible niche player. Clients include 3i, AstraZeneca, Barclays, BAT, Biffa, Deutsche Post, Ford, Goldman Sachs, HBOS, KKR, Nokia, National Grid, O2, Philips and Thames Water.
For more information
Georgina Golding, Marketing Co-ordinator, Efficio, on:
+44 (0)20 7553 6938 or +44 (0)7515 199 425 or on
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