So-called “non-strategic” purchases account for between 15 to 50%* of a company’s total procurement volume and15 to 25%* of its revenue. They also account for more than 50% of orders and 80% of suppliers. This finding underscores the need to optimize these purchases. To achieve this, Widoo offers to help you implement an effective and innovative strategy through five key performance drivers.
Lever #1:The volume effect achieved by aggregating and pooling the purchasing needs of member companies
This phase involves identifying the products or services to be made available to members. The goal is to maximize economies of scale by pooling the needs of hundreds of independent companies by product and service category. In procurement jargon, this is known as the “volume globalization” effect , which enables price reductions of at least 15 to 20 percent.
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.
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.
So-called “strategic” suppliers are those for which implementing a scorecard is essential: they directly impact the operations of the company or a department. For example, an IT department will not have the same strategic suppliers as a general support department. Each department must identify its own 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.
