Cost reduction in procurement

Cost optimization is the central activity of the procurement function, and its importance is particularly pronounced in the United Kingdom amidst the ongoing economic challenges. In light of the recent high levels of inflation that have affected the UK economy, this task today is characterized less by traditional cost reductions and more by the urgent need to avert further increases.

What makes KGM Strategy special as a procurement consultancy?

As an international consultancy, we are one of the leading specialists for strategic procurement and supply chain management in the United Kingdom and across Europe.

Procurement and supply chain management is key when it comes to strategic management, facing future challenges, and generating value for the entire company. Whether it’s decarbonization and sustainability, end-to-end digitalization, or supply chain reengineering and risk management: as a management consultancy with in-depth expertise and many years of project experience in procurement and SCM, we develop individual solutions for your situation.

Our mission is to anchor long-term competencies, allowing your teams to expand further and achieve successes independently.

Exploiting potential through cost optimization

Procurement has become more complex in recent years. The familiar matrix of price, quality and availability has been expanded to include the dimensions of sustainability and capital commitment. Inflation is increasing the pressure to tap cost optimization potential in all dimensions.

Digital solutions already provide support in many areas today, but they require an intelligent strategy and control in order to unleash real benefits.

Buyers need clear goals derived from the overall strategy in order to meet the diverse requirements in the best possible way.

With over 20 years of experience, our experts can advise you on identifying potential for cost stabilization and offer you full support in implementing measures to avert price risks and optimize procurement costs.

PROCUREMENT: LET’S GET REAL!

The KGM Strategy VALUE PROTECTOR

As part of our potential analysis, we segment and analyze the costs for all procurement goods, purchased products and services by commodity group. We consider both direct and indirect requirements and take into account the current procurement and market situation.

With our benchmarking approach, we have the appropriate strategy to deliver best-in-class solutions in your industry for your entire procurement organisation or for selected resources. In doing so, we do not work with across-the-board cuts, but examine within the framework of demand management what your expenditure structures are like and where there is a need for cost optimization. As a result, you receive concrete information from us on which cost savings can be realised.

Effective procurement creates value for every company

After the analysis phase, we work hand in hand with your procurement staff to analyse the identified potential. To do this, for example, we sound out the procurement markets again and enter into negotiations with your suppliers or qualify new suppliers if necessary. Especially in today’s world, where remote working from the home office has become indispensable, online auctions are a valuable means of acquiring new suppliers and creating new competition among established suppliers. We would be happy to develop suitable concepts with your employees and implement online auctions.

Cost optimzations can be achieved relatively quickly in many areas – within a few months. They increase the profitability of your company and have a direct positive impact on the margin. In addition, the freed-up funds are available for investments and thus pave the way for innovations and higher value creation. The goal of our projects is always to build your team into real partners in value creation. To this end, we also offer individually tailored further training in procurement.