Unlike improvements in sales growth, 100 per cent of savings on procurement impact directly on a company's profit line. With profit margins for some larger organisations at only 3-4 per cent, even a 5 per cent reduction in supply chain waste can double a company's profitability.
The two examples below illustrate the dramatic benefits that companies are able to achieve through eliminating waste in the total supply chain:-
Ford Motor Company moved its $16 billion purchasing system to the Internet
and realized a 33 per cent reduction in design cycle time (to 24 months).As
an added bonus, it was able to remove much more of the cost from the process
to make its products less expensive.
General Electric created a Web-based supply chain and reduced its product-cycle time by 50 per cent. At the same time it was able to slash its purchasing costs by $700 million over a three year period.
Whether your business is large or small our team of purchasing experts can devise a strategy for you to eliminate supply chain waste and consequently improve bottom line performance.
If you require any additional information about reducing supply chain waste or you wish to find out how our range of purchasing & supply chain solutions might benefit your company, please e-mail Sallie Cole at sallie.cole@supplychainconsultants.co.uk or alternatively telephone Sallie on 44 (0)1827 50341.
