Ray Collis

Better Buying Goes Straight To The Bottom Line.

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Buying and the bottom line

In these low growth times organizations are realizing that cutting costs is an easier than growing revenues.  As one buyer pointed out ‘cutting costs goes straight to the bottom line – if your net margin is 10% then it takes 10 euros more in sales to achieve the same impact as a one euro cut in costs.

Can Better Buying Save You 8%?

Better buying can deliver a real quick win in terms of improved performance, in the public and private sector alike.  Take for example the auditor of Irish public sector spending who boasted recently that a centralized approach to procurement reduced spending by more than 8% in its first year alone.

Bad buying costs money.

Bad buying costs money.   That is to say when purchasing power is widely distributed, buying procedures are lax and there is little scrutiny of decisions made, organizations needlessly waste money – lots of money.  So, it is that getting better at buying can have a major impact on the bottom line.  Typically that means:

  • Fewer people doing the buying
  • A centralized approach to procurement
  • A step-wise process regarding how buying decisions are made
  • Greater scrutiny over what is spent.
  • A shorter list of suppliers
  • Improved buying skills
  • Renegotiation with vendors

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