Don't underestimate the cost or risk to your business of managing numerous low-value suppliers.
🔍 Have you considered:
• The true cost of administering multiple low-value transactions?
• The resources tied up in contract setup for minor purchases?
• Potential price inconsistencies across similar services?
According to a 2023 Deloitte survey, 65% of CPOs identified supplier rationalisation as a top priority for cost reduction and risk management.
Ready to tackle your supplier tail? Here's a strategy:
1. Map transaction values by supplier and category
2. Assess associated risks
3. Consolidate suppliers for improved pricing leverage
4. Establish and monitor a preferred supplier panels
5. Implement purchase cards for one-off, low-risk transactions
A McKinsey study found that effective vendor management can reduce costs by 5-15% annually. Can you afford to ignore your long tail?
Don't have time or resources to fix this? At August Consulting, we can implement supplier management strategies that will streamline your processes and mitigate risks.
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