Reduction of Material and Purchasing Costs

Reduction of Material Costs

It is almost always possible to reduce material costs by 5 - 20 % using the following measures:

• A holistic supply strategy
• Optimized processes and organizational structure
• Systematic supplier development
• Frequent benchmarking of existing suppliers
• Globalized sourcing
• Alternative purchasing channels
• A reduced range of product variants
• Constructive adjustments, optimized specifications, and technical component substitution
• Reduced inventories
• Adjustment/improvement of staff qualifications

In Helbling procurement projects, for example, room for improvement in procurement is systematically identified, leading to sustainably lower material costs, from the following perspective:

• Reduction of material costs through a total expense view
• Minimized procurement risks, e.g. through establishment of second sources
• Improved organizational structure and processes in procurement
• Streamlined procurement interfaces and improved integration of procurement processes with other key company processes (e.g. development and sales planning)
• Shortened development time and time to market
• Assessment of the negotiating position with long-standing suppliers through benchmarking against world-class names