Cutting Operating Costs Through Centralized Procurement

5 MIN. READ

centralized_procurementIn today’s business climate, reducing operating costs and increasing efficiencies are top of mind for most facility managers and building owners. Implementing strategies to cut expenses, improve NOI and streamline purchasing processes are vital to a company’s growth and performance. Fortunately, Raiven has an online platform that makes strategic sourcing and supplier & contractor management easy.

What is centralized procurement?

Procurement centralization and optimization are ways that facility and property managers can take control of expenses and rein in rogue spending. The aim is to have one department or location that manages all the purchasing decisions within the company.

Without proper management and guidance, employees will follow their familiar unapproved path to order building supplies, which can wreak havoc on budgets and NOI. When employees purchase items in their own manner, outside the company’s purchasing parameters, expenses spiral out of control and are difficult to get back on track.

Pros of centralized procurement include:

  • Improved efficiencies through consolidating suppliers on an online platform
  • Strategic sourcing to gain greater discounts on routine purchases
  • Easier management of qualified suppliers
  • Less rogue spending
  • Greater transparency across business verticals

Implementing a centralized procurement platform and utilizing strategic sourcing can save money and simplify the way routine purchases and other business activities are conducted. Employees benefit from a simpler, more structured process that is clear and within your company’s purchasing guidelines.

Introducing strategic sourcing is a no brainer

Strategic sourcing is a method for businesses and managers to analyze spending within the organization, continuously find the best deals on supplies, manage and cultivate relationships with suppliers, and ensure compliance. When introduced successfully, you can expect to realize great benefits, such as:

  • A better understanding of the entire supply chain
  • Improved cost savings in the short and long term
  • Contracts with the top suppliers in the industry
  • Performance metrics to optimize your sourcing program

When implementing a strategic sourcing program in your organization, there are several things to consider:

  • Understand your current spending practices and actual expense numbers. This will enable you to make the best decisions for future spending. Are you tracking spending and the protocols around sourcing? Having this data is crucial and will help you roll out a sourcing program with fewer snags.
  • Get familiar with your supplier network. Understanding the key players in the maintenance, repair and operations supplies (MRO) realm is important so you can negotiate sweeter deals for your business.
  • Analyze the performance of your supplier network. Ensure that your contracted suppliers are holding up their end of the bargain and maintaining compliance. When discrepancies come up, address them immediately, and, if needed, research other suppliers that can meet your expectations.

Saving time and money

Facility managers routinely purchase building stock, cleaning supplies, maintenance materials, PPE, tools and other essentials, looking for the best deals in order to save money. The beauty of Raiven’s platform is that suppliers are grouped in a marketplace, and through economies of scale, better rates are negotiated for the benefit of all purchasers.

Automating and centralizing these routine processes saves time and increases efficiencies. Employees will not need to surf websites such as Amazon to source items when they have a clean marketplace to choose from nationwide suppliers, like Grainger, Ferguson and Office Depot. Purchases are made securely and quickly at the best pricing available.

Utilizing Raiven’s browser extension, when employees are shopping online, they are alerted when a better price is found from your preferred suppliers, which leads to better decisions, time and money savings, and increased productivity. Raiven works on a variety of websites, including Amazon, showing them where they can purchase the item at one of your approve suppliers, bringing your buyers back into compliant purchasing.

Following these best practices will have a positive impact on your bottom line and will also tie together other facets of your procurement program, such as supplier consolidation and compliance.

Supplier consolidation

Managing one supplier can be challenging but trying to manage tens or even hundreds suppliers is extremely difficult and usually results in issues that escalate into major problems and headaches for your team. It also takes up precious time and resources.

A vast and robust supplier pool typically stems from good intentions. Teams want to onboard suppliers that they used to work with at old places of employment and that they built solid relationships with. But if several employees take this approach, the result will be a plethora of suppliers in the system, and inevitably, many of them will end up being overpriced and underperformers.

The importance of supplier consolidation

Having a limited number of select and vetted suppliers that are proven performers and can provide cost savings to your business is essential. As a property manager, there is no need to waste time with those that do not give you the best benefit for your money. Ideally, you want a limited supplier base that has been thoroughly vetted, qualified and approved by management.

Consolidation simplifies the process and can save you money

Here are a few benefits of consolidating your suppliers with Raiven:

  • Transparency— See exactly who the preferred suppliers are, their pricing and offerings.
  • Only top-performing suppliers are picked — No need to worry about whether your suppliers will come through for you. They have already been vetted and given a score.
  • Increased purchasing power — With a limited number of suppliers, companies can push a higher volume of orders to a smaller group of suppliers, which will generate bulk discounts for your company.
  • Time savings — With fewer suppliers to manage, this will enable you to direct your precious resources to other business endeavors.

Let Raiven help your business centralize, optimize and consolidate

Understanding and implementing a centralized procurement and supplier consolidation program will transform your business, optimize efficiency and save you money. When looking to cut costs across your organization, these are key areas that cannot be overlooked.

Take advantage of numerous benefits, like the ease of purchasing, preferred pricing from select suppliers, and smoother management of contractors and compliance, all through Raiven’s innovative platform. Discover how Raiven can help you centralize, optimize, consolidate and increase NOI today. Reach out today for more information or to schedule a demo.

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