How Important Is Supplier Consolidation?

For all businesses the costs of supplies and the supply chain is under constant scrutiny.

As businesses look to reduce costs and streamline processes, consolidating suppliers is an obvious yet sometimes difficult place to start.

Long standing relationship with individual suppliers can play a role in decision making however when it comes to supply chain costs and efficiencies there is no better time than now to look into the benefits that come from supplier consolidation.

Firstly don’t look at this exercise as damaging supplier relations look on it as a chase to strength and improve supplier relations to a mutually beneficial point.

Keep in mind the overall strategy of supplier consolidation is to reduce prices, reduce processing and administration costs and bring a better understanding of what is important to your business.

Better Purchasing Price

Consolidate purchasing to one vendor and improve economies of scale allowing you to leverage from one supplier to supply with more for a lower cost.

Reduced processing and administration costs

One of the largest benefits to supplier consolidation is the reduced costs. Taking advantage of combining freight, delivery and processing costs can make a big difference to the bottom line. Consider the time you spend ordering, talking to suppliers, following up multiple suppliers, changing product, processing purchase orders and invoices. For some companies processing multiple invoices and following up supplies can be a very resource and labour intensive activity.

Time Savings

Being proactive rather than reactive to supplier consolidation allows you and your team to save time in all parts of the purchasing process, from one order to one invoice to pay.

Reduce risks around delivery, price and time management

A single point of contact or a single company to contact can reduce the risk of order overlay, multiple orders, delivery delays and time spent doing price comparisons. Use your time wisely and spend time working in your business rather than chasing multiple suppliers.

Customer loyalty and better supplier relations

Spend less time managing multiple vendors with one supplier interface, building and strengthen the relationship. Having a supplier who you think of as a partner in your business is beneficial to both sides of the relationship.

Supplier consolidation is an important step forward to improvement and efficiency in any busy, and definitely something to consider when placing your next product order.

Here at FDG we try to give our customers peace of mind, letting them focus on the big picture, while we take care of the detail. This means you can consolidate your equipment, fastenings, tools and consumable supplies into one easy transaction with FDG, reducing your costs on freight, administration and product price all supported by service which keeps you moving and making.

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