If the thought of delving into supplier consolidation is a daunting task and if you're not sure how to start, begin by asking yourself a few of the following questions.
The thought of delving into supplier consolidation may be a daunting task and if you’re not sure how to start, begin by asking yourself a few of questions.
- Is our supplier list excessive or overwhelming?
- Do we struggle with proper supplier management?
- Are poor supplier relationships affecting supplier responsiveness?
- Is our supplier optimization falling short?
If you answered yes to any one of these questions, you likely have unnecessary internal costs associated with administrative tasks and may be exposing your firm to added risks that could affect the bottom line. These inefficiencies are more common than you think. Apex Systems serves well over 1,000 clients annually, in all industries, and one notable trend that we continually see is unmanageable supplier lists. Furthermore, the leaders of Apex’s Alliance Partnership Program believe that supplier optimization will continue to be one of procurement departments’ top goals as their own contingent labor programs and services mature.
There are many facets to supplier consolidation, but the main objective is to review your supplier list to identify and retain the right partners - those that match the needs of your business. A disparate list of suppliers can introduce risks such as poor service or product quality, inconsistent delivery, and contract non-compliance. Consolidating your list will free up more time to proactively review and address potential risks with supplier compliance and other legal policies. It also means increased productivity with the opportunity to be strategic with core suppliers by collaborating to gain dual-leverage, while fostering more commitment from your trusted partners. This commitment is typically reflected by consistent and quality service, as well as increased supplier responsiveness, which means more and easier discussions about cost savings opportunities. As a result, you will be able to optimize your purchasing power and investigate your ability to implement suppliers’ specialty services more effectively.
Supplier consolidation can put an end to disparate supplier relationships and shift your standard to collaborative partnerships, because when you have the right suppliers, they will be more proactive and attentive to your needs. Just remember that building and developing relationships is a two way street, especially if you’re looking for true partners and transparency.
Call it supplier consolidation, supplier optimization, supply chain management or supplier rationalization; if you haven’t done it already, make it a goal to review your supplier list sooner rather than later!
About the Apex Alliance Partnership Program
Apex develops strategic relationships with MSP partners utilizing their Alliance Partnership Program (program) and puts an emphasis on channel partnerships that provide value propositions to jointly meet their client’s needs. Since the early 2000's, the program has expanded to include all of the largest global MSPs.