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Reduce the supplier base? This is why you should do it now

It often happens that large organizations have a very large and extensive supplier base. This is not surprising, because you do not want to spend too much money and every supplier offers different products or services. This also means that there are many points of contact and different payment terms, because each supplier sends its own invoices. But what happens if you reduce the supplier base? That can bring many benefits! Which are these? You can read that in this blog.

 Save costs up to 21%

 When you reduce the supplier base, this can save your organization a lot of money. This can amount to a saving of 21%. A big advantage of this is that you reduce the Total Cost of Ownership (TCO), which means that you reduce the total cost of purchasing and owning a product or service throughout its life cycle. The costs that you have to think about are, for example, the costs for maintenance of products, training or courses that employees have to follow, but also the costs for the acquisition. The costs go beyond the purchase price of a product.

 One supplier: one point of contact, one invoice and one payment term

 When the supplier base is reduced, this means that a large group of suppliers is replaced by one large supplier. This means that fewer invoices are coming in, actually only one. This also means that there is only one payment term and one point of contact. This of course saves a lot of time and thus relieves you of various departments. The time you have left can be spent on other useful tasks and invoice management is therefore also much more efficient.

 Spend time optimizing internal processes

The time you have left can be spent on optimizing certain internal processes that you normally don’t get around to. If invoice management and all other supplier matters are digitized, everything will be much more efficient. Saving time can of course also be done in other ways, such as indirect procurement. It is also possible to look at whether this can be optimized.