The Importance of Purchasing and Cost Reduction Strategies
Making smart financial decisions is crucial to the sustainability and profitability of your business. You need to develop strategies that can be beneficial for your business. Purchasing can sometimes be your biggest obstacle to making smart financial decisions. If you do not have any purchasing strategy or you are making random decisions for your purchasing activities, you should review your costs. Are you receiving the products at the right time? Can you compare your suppliers effectively and efficiently? Are the products you purchase of sufficient quality? Are the products you purchased high in cost? How does the delivery process work? All your answers to these questions will help you understand whether you have made a successful purchase.
Why is purchasing important? If you look at it historically, you can see that purchasing has a key role in getting the lowest possible price. Obtaining the lowest possible price was made possible by the positive relationships developed with suppliers. Choosing the right materials, the right price curve and the right time are also important for your business to run. We can compare purchasing to the gears that run a clock. Each gear moves the other, allowing the clock to work – completing the process.
The importance of purchasing and cost reduction strategies have affected supply relationships and contracts over time. With more cost savings coming to the fore, issues such as process improvements, product improvements and better suppliers or the development of existing suppliers have begun to be on the purchasing agenda.
Cost Reduction Strategies
How can I reduce my costs when purchasing? The question may bother you. There are many methods to reduce your costs, you can reduce your costs by starting from the basics, that is, with expense analysis.
Expenditure Analysis: You can review your past expenses and prevent unnecessary expenses in the future. In fact, using software that makes forward-looking predictions will help you achieve more efficient results. You can also reduce possible risks by auditing your expenses earlier.
Training for Your Employees: Training for your employees can be another way to reduce costs. Training your employees will increase your company's efficiency and have a positive impact on profitability. Your employees' decision-making abilities will improve and they will make better decisions.
Supplier Relations: Your relationships with suppliers are very important to reduce your purchasing costs. How relationships will be conducted should be determined in advance. You should strengthen your cooperation with suppliers. Thus, mutually beneficial strategies can emerge. It will not be good for you to be dependent on only one supplier. You can explore alternative suppliers and cooperate with suppliers that sell products at more affordable prices than your current supplier. Software developed for this will make your job easier. You can evaluate many suppliers who offer you through the system and easily agree with the supplier who offers the best offer.
Cost Savings According to Demands: It is very important to manage your demands well. Before creating your purchase requests; Do I really need this product? It is necessary to ask. You can find more effective solutions and reduce your demands to more reasonable levels. For example; You can reduce your travels to follow up on a project. You can prefer video conferences instead of face-to-face meetings.
Managing and Improving Your Total Costs: Performing an analysis of your total costs should be your first step. Methods such as total supply cost and Just in Time have been developed to calculate the total purchasing cost of a product. It will be useful to limit some costs to reduce transaction costs. Controlling the entire process with software helps you find factors that affect your total cost. Automating manual areas saves money on managing sourcing and supply processes.
Cost Reduction in Construction
Construction projects are perhaps the places where purchasing activities occur most intensely. Costs regarding raw material supply and material usage should be closely monitored to save money on the project. Software that allows you to track bid items before starting projects and take into account changes in exchange rates - considering that many raw materials in construction projects are foreign currency-based - will make your job easier. To reduce costs in construction, DIGITA YoneTeam initially offers you solutions that can reduce your costs by 3% to 5%. This software, which will help you minimize human errors, will provide great convenience, especially in calculating the progress payment amount to be made with subcontractors.
Conclusion
Whether it's purchasing transactions or other projects and business processes in your business, the most basic way to reduce costs is to proceed with a plan. It is necessary to be able to foresee possible risks and overcome them with the least damage. Automating your entire business process by getting rid of manual systems will provide you with great convenience and enable you to obtain the closest results in your predictions for the future. YoneTeam is a special software that does this for you. You can create your cost reduction strategies very easily with YoneTeam.
