Here are all the points that you should look to cover when looking to reduce costs and maximise value in this area:
- Obtain itemised details of your historic purchases over the last 12 months. This should include product code, description, UOM or pack size, quantity and prices.
- Consolidate all the data and sort in descending order of line value
- This is your baseline data
- Identify those items that represent a minimum of 80% of the overall total
- Review the remaining items and highlight any product that is purchased on average once a month
- The items identified from the last two points are now classed as your core list
- The remaining items are now classed as non-core
- Issue both sets of data to an appropriate number of suppliers, including current ones.
- Request like for like quotations & ensure they provide the same level of detail as the baseline data
- Make sure the suppliers quote differently for the core and non-core items, i.e. as they would if they were already your supplier. This is to demonstrate the increased discount core items receive but also to ensure that non-core pricing is not inflated.
- It is critical to analyse the data on a like for like basis. Take into account different pack sizes or dimensions of products to obtain a true comparison
- Where applicable, ensure suppliers are offering the same or an equally branded product
- Provide feedback to every supplier. Don’t disclose pricing but give approximate percentage variances to continue negotiations.
- Confirm that pricing will be fixed for a 12 month period and delivery is included
- Look to select just one supplier unless unavoidable
- Implement on the basis of introducing on-line ordering
- Select one person to be master account holder. All orders to go through this person or at the very least be confirmed as acceptable.
- Use the supplier’s expertise to limit visibility of products to just the core list except the master account holder.
- All requests outside of the core list should require approval from line manager or at the very least the master account holder.
- Review the core list on a quarterly against actual purchases and update as required
- Where possible close all previous stationery supplier accounts
- Check purchase ledgers on a monthly basis to ensure that all requirements are being placed with the selected supplier.