At present, competitive performance and cost-cutting are central to the strategy of over 80% of senior managers. To go one step further, despite the numerous savings programs already carried out, the procurement function has to mobilize the other functions of the company to optimize expenditure.
In the last 20 years, companies have been launching an increasing number of cost-cutting programs. Professional buyers have been recruited, negotiation practices have been industrialized, and most procurement categories have formalized strategies. This continual effort to improve performance has brought about the rapid development of sourcing in low-cost countries and a very high rationalization of supplier panels.
At present, competitive performance and cost-cutting are central to the strategy of over 80% of senior managers.
Procurement managers are therefore faced with the major challenge of continuing to cut costs when it seems that everything – or almost everything – has already been done.
Although the action to be taken depends on the business sector in question, and the maturity of the company, we are convinced that some areas of competition are still accessible.
- Addressing categories that were previously "sacred" (e.g. advertising, communications, legal, etc.)
- Involving decision-makers in the definition of procurement strategies for each category
- Reviewing consumption policies: buying less, etc.
- Developing a sourcing policy, in particular in low-cost countries
How can Argon Consulting help you?
In diagnosis phases, by:
- Identifying and validating the areas for action
- Encouraging stakeholders to adopt target processes, roles, and responsibilities
- Setting ambitious targets and ensuring that they are accepted by the management, which then becomes accountable for achieving them
- Defining the action plan to get there
And in the implementation phases, by:
- Revitalizing the organization
- Managing the transformation program and ensuring that benefits are tracked through a system that allows constant monitoring of results
- Ensuring the operational implementation of action to reach a business target and obtain the benefits
- Assisting in the transformation of human resources