Productivity
Most procurement professionals focus on buying materials specific to a business (retail) or process (manufacturer) set of requirements. Personally I prefer to develop a long term cumulative cost saving procurement strategy with my manufacturing clients. This strategy ensures that the first stage delivers the expected negotiated materials cost however, second stage includes reviewing a manufacturer’s total production process by meeting with the engineering, production, sales and marketing personnel as a participant in the procurement process. When this strategy is deployed effectively, it is possible to discover hidden cost saving opportunities by removing low value processes and making them part of the global procurement strategy. The cumulative savings opportunities can exceed the initial negotiated cost structure for materials. This plan has been successfully implemented in medium sized manufacturing companies. Examples of successfully implemented productivity contribution related projects are as follows:
- Pre-printed metal cans
- Standardized bottle neck and cap sizes
- Standardized multi-dose plug sizing
- Actuator Extension tube pre-assembly for aerosol products
- Aerosol channel cap with actuator extension tube pre-assembly
- Low value product production shifted to Asia partner factory