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How to optimize non-strategic purchases and reduce their costs?

Non-strategic” purchases represent between
15 à 50%*
of the total volume of purchases and15 to 25%* of a company’s turnover. They also represent more than 50% of orders and 80% of suppliers. This observation highlights the need to optimize these purchases. To do this, Widoo offers to deploy an effective and innovative strategy through 5 major performance levers. 

Lever number 1: thevolume effect thanks to the collection and pooling of the purchasing needs of member companies

This phase corresponds to the identification of products or services to be made available to members. The objective is to maximize a volume effect by pooling the needs of hundreds of independent companies by product and service category. In the buying jargon, this is called the “Volume Globalization” effect , allowing the price to drop between 15 and 20% minimum.

Lever number 2: negotiation and rationalization of products/suppliers

Once the volumes have been identified, it remains to standardize the expression of the need as much as possible in order to obtain an offer that best corresponds to the real needs of companies. For this, the well-known rule of 20% of products corresponding to 80% of the needs is very useful to build a call for tender.

In the same spirit, the exclusion of the most atypical or spot suppliers is necessary in order to keep only those who are really able to provide a superior service or product.

These two steps together should also contribute significantly to cost reduction.

To reduce the costs associated with supplier management, but more importantly to reduce the number of orders and associated fees, Widoo allows you to streamline the supplier portfolio. The replacement of many small suppliers by a single distributor with a large offer allows for the same purchase volume to reduce the number of orders while increasing the number of lines per order.

Comment optimiser ses achats non-stratégiques et réduire, ainsi, leurs coûts ?

Lever number 3:the selection of the best partners of the group through “score cards

The best way to ensure the performance of your suppliers is to set up scoring tools based on precise and understandable criteria, which are detailed in the supplier “score card”.

This score card makes it possible to determine the score of a supplier on each of the defined criteria, the areas of improvement and its positioning in relation to other suppliers.

 The so-called “strategic” suppliers are those for which the implementation of a score card is essential: they directly impact the activity of the company or a department. For example, an IT department will not have the same strategic suppliers as the general resources department. Each department must identify its strategic suppliers. 

Generally, spend analysis by supplier is a good indicator of strategic suppliers. The larger the spend with a supplier, the more strategic the supplier is for the company.

 

Lever number 4: animation and availability of framework agreements on the digital platform

By focusing on innovation and digitization, Widoo makes it possible to significantly reduce the cost of transactions (search, order and invoice).

Wherever the product or service category allows, Widoo asks its supplier partners to favor online solutions.

 

Lever number 5: eliminating time spent on sourcing, benchmarking, monitoring

Widoo saves you time.

The final area of cost reduction is to reduce the time and effort for users to actually access the products they need.

This frees up their time to focus on higher value-added tasks. 

In addition, thanks to all our framework agreements, the market prices of products and services are a real basis for comparison with what you used to pay.

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