Company purchases can generally be categorised into 3 classes. Classes A and B are already integrated into corporate purchasing strategies. Class C, by contrast, is often under-estimated; and yet, if properly optimised, it can generate savings of up to 20%.<\/p>\n
Classes A and B<\/strong><\/p>\n Class A<\/strong> – covers all products and services directly related to the company\u2019s core business. It generally represents 75% of the total purchasing volume.<\/p>\n Class B<\/strong> – covers products and services that are peripheral to the core business but highly recurrent. It accounts for 20% of the total volume.<\/p>\n For both, there are strong incentives to secure and optimise purchasing. Companies tend to consolidate these categories with a small number of strategic suppliers by standardising and specifying their needs in detail.<\/p>\n Class C purchases<\/strong><\/p>\n All of the other, more diffuse, purchases are grouped together in Class C.\u00a0It encompasses a wide range of products that are purchased in a much more irregular and unstructured way.<\/p>\n They make up only 5% of purchasing volume, but account for the majority of administrative costs as they involve 60% of the order volume and 75% of the total supplier base.<\/p>\n Approaches that can be used to\u00a0rationalise these purchases include: reducing the supplier base, deploying electronic ordering solutions, and promoting suppliers that are listed on every site. This type of approach can generate savings of up to 20%.<\/p>\n Optimising Class C products<\/strong><\/p>\n Once a company has clear visibility of its Class C consumption, it can become evident that some of these products are ordered on a regular basis.\u00a0They represent large spending volumes, but are dispersed over so many different product lines that they are hard to identify.<\/p>\n These products could easily be treated as Class A or B purchases, with standardisation of requirements, annual volume forecasts, optimisation of the supply chain, and concentration on one or two suppliers to reduce costs.<\/p>\n How have Manutan achieved this for customers?<\/strong><\/p>\n After rationalising the supplier portfolio for a food industry customer, Manutan identified\u00a0widespread fragmentation in the consumption of plastic trays within the business.<\/p>\n In total, several hundred thousand Euros were being spent at 4 factories on trays\u00a0that were similar, but manufactured by different suppliers.\u00a0To streamline this, Manutan drew\u00a0up specs for a tray which could be used at all sites and put out a call for tenders with their customer; then they organised the supply chain.<\/p>\n These actions generated an annual saving in the order of 100,000 euros.<\/p>\n