When you finally have the time to catch up on tasks such as budgeting, you realize that costs are reeling out of control.
But that’s just a symptom of the problem. Actually, it’s your supply chain that’s broken.
A Cleveland State University study found that “the ability to form and manage supply-chain relationships is a critical organizational asset that can generate durable strategic advantage.” What’s more, another study found that the firms that are best at supply chain management are approximately twice as financially sound as their competitors.
Here are three common reasons why, based on more than a decade of Vantage’s work with mid-market firms such as yours.
1. You lack data.
CFOs breathe, eat and sleep data. But there’s some data you just don’t have access to: industry benchmarks on key spending categories, for example. At Vantage, we generate—and have access to—all the data you need.
Because we’ve worked to help firms such as yours squeeze savings out of their supply chains and sourcing efforts everyday for 15 years, we have access to rich data and industry benchmarks that give us a sense for what you can potentially save.
At Vantage Cost, our data has saved mid-market firms anywhere from $100,000 annually to $1 million by revamping their supply chains.
Vantage worked with a $400 million firm experiencing a strain on profitability. They asked us to analyze $12.7 million of their spending data. What we found is that their supply chain was too decentralized.
We helped them eliminate 98 suppliers and create $1.6 million in savings.
3. You’re failing to audit supplier compliance.
Even the companies who are most savvy in their spending reductions often miss this key step. What we’ve learned at Vantage is that negotiated savings with suppliers aren’t always realized—leaving your bottom line unchanged.
Working with Vantage changes the equation. Because our compensation is tied to your realized savings, we audit supplier compliance after implementing cost reductions.