AEG

Purchasing

A typical manufacturing company will spend between 40 and 60% of revenue on bought in materials, services and components yet it is frequently the most neglected part of the manufacturing system. Due to the specific difficulty of changing suppliers of components, buyers continue to use the same suppliers for years even when their quality is not best in class or the value they add is not what it could be for the cost. The relationship can become dull and innovation sparce. This all adds up to a massive business improvement opportunity for the typical manufacturing organisation.

In looking at the purchasing element of the manufacturing system we like to understand how much better the value to cost ratio can be without changing suppliers. Often looking at the relationship between supplier and buyer with fresh energy and expectation can produce surprising improvements. Where this approach does not produce the results required we enlist the assistance of Vendigital Ltd, a specialist in finding the optimal suppliers from around the world and negotiating the best contracts. The outcome of this type of approach can be the identification of eye catching cost saving opportunities.

These savings opportunities clearly only benefit the business if the opportunities can be implemented without incurring uncontrolled supply chain risk. We have considerable experience in assisting companies to change suppliers in a controlled and efficient manner.