Published: 20 March 2019
Summary
Cost optimization is a fundamental responsibility for sourcing and procurement leaders in supply chain. This research provides a framework and top ideas to optimize costs through both short-term tactical improvements and longer-term transformational changes.
Included in Full Research
- Operate Better by Improving Pricing, Policy Enforcement and Spend Management
- Negotiate Better Pricing Conditions With the Supply Base
- Improve Compliance With Policies and Contract Terms
- Increase or Optimize Spend Under Contract
- Increase Automation and Reduce Time Spent on Low-Value, Administrative Activities
- Negotiate Directly With Subtiers for Raw Materials and Components Used Across Multiple Suppliers
- Identify, Measure and Control Extraordinary Costs
- Reconfigure Procurement Processes, Supply Networks and Product Specifications to Reduce Cost
- Deploy Category Management for Improved Spend Visibility and Control Across the Organization
- Outsource Noncore Process Activities to Suppliers and Other Third Parties
- Engage the Supply Base to Identify Cost Optimization Opportunities
- Reduce Working Capital Tied to Supply Operations
- Revise Product Specifications to Eliminate Excess Quality and Reduce Material Costs
- Transform Procurement Capabilities by Deploying Digital Strategies and Leveraging Extended Collaboration Networks
- Deploy Digital Technologies to Automate and Optimize Manual Procurement Processes
- Launch a Companywide Cost Optimization Program With Participation of Functional Leaders Across the Organization
- Implement Total Cost of Ownership Models Across Critical Categories
- Create Shared Value Partnerships With Strategic Suppliers and External Networks