Vendor Managed Inventory

There’s good reason that giants like Walmart and Home Depot work with the Vendor Managed Inventory model.  This type of supply chain arrangement makes a lot of sense for both parties and creates a symbiosis which keeps needed supplies and goods on hand, without overstocking.

This type of supply relationship allows information to be shared electronically between the buyer and the vendor.  The data obtained through mutually accessible software solutions allows inventory needs to be forecast, using statistical analytics.

You know that if the big boxes are using this method of procurement for at least some of their operations that there must be something to it, so let’s take a closer look.

More information.  Faster.

One of VMI’s most attractive features is undoubtedly the facility it offers for sharing more information, faster.  It’s in the flow of information and the way it’s deployed that the secret of this methodology lies.

By aligning business objectives and streamlining supply chains, every facet of operations on both ends of the arrangement benefit.  Inventory is less likely to languish, service is drastically improved and sales are increased.

It’s in the flow of information that all these ends are achieved.

Key information flows between vendor and buyer, allowing for precise calculations to be made concerning inventory.  Coupled with monitoring and reporting, the supply chain is refined because needs are accurately identified.

Information makes the wheels go around

Beginning with the provision of a Product Activity Report from the buyer, the vendor is given access to key information on transfers and sales, as well as what’s on hand, what’s in the pipeline and what’s scheduled to be there next.

From this information, VMI software determines timelines for restocking.  Information about the product’s position in the chain is constantly monitored to ensure that the information reflects all factors, including exceptions.  Then, a purchase order is issued to the supplier. Next, the PO is acknowledged by the buyer.

Total supply chain transparency

Besides all that ultra-useful and revelatory information, VMI provides a level of transparency that serves everyone exceptionally well.

Information is reported to both vendor and buyer and is always available on demand.  Mutually agreed upon measurements against stated objectives like turnover, in-stock data and transaction costs are monitored and reported on, ensuring that everyone’s on the same page – streamlining the supply chain and creating a value center in procurement.

Is VMI for you?

Vendor Managed Inventory is a deceptively simple methodology, but you need to have all the components required to make it work for you at its most dazzlingly effective.

CenterPoint is a trusted procurement advisor with 15 years’ experience bringing quality procurement solutions to companies like yours. Our experts are seasoned procurement professionals who have served 20% of the Fortune 500 over the past decade.

We leverage $850 million of indirect collective spend to save you money on your daily business needs.  We do it with the power of numbers, keen data analysis, and focused account management that deploys data to get you what you need.

Is VMI for you?  Contact us.  Let’s find out!

The post Vendor Managed Inventory appeared first on Centerpoint.

source https://centerpointgroup.com/vendor-managed-inventory/

How to Increase the Effectiveness of Cost Saving Initiatives in the Second Half of 2018

Cost savings initiatives come and go and in the aftermath of all that apparent cost cutting, how do we assess the success of what we’ve done?

All too often, success is declared based on spending not increasing.  That’s not saving money. That’s holding the line.

You may well gauge the success of a cost savings initiative according to the amount of time expended.  If you save time, it’s arguable that you’ve saved money. The same may be said of increasing efficiencies.  But were costs a reduced? Did a line item shrink?

You’re still paying all the people involved in the initiative and in most cases, those people aren’t being paid by the hour.  Do the math – that’s not cost savings.

This post is about how to increase the effectiveness of cost savings initiatives in the second half of 2018.  You started out the year thinking you’d get there and you still can.

Real cost savings

The only real cost savings that mean anything are those which directly and visibly reduce specific line items in the budget.

If your cost savings initiative is, alternatively, avoiding costs, that’s not the same thing.  You’re addressing the numbers on the balance sheet. When you’re done, those numbers should be smaller.

In your planned spend are the seeds of real cost savings.

Widen the scope of your quest

Kicking off a cost savings initiative with one large target in mind may seem attractive (even heroic), but success will be had in widening the scope of your quest.

To begin with, lopping off chunks of one item is bound to de-stabilize the integrity of the target.  Cost savings are best distributed throughout organizations to reduce impact that might have such an effect.

Instead, choose at least 10 targets with smaller goals which add up to the kind of cost savings you’re seeking.  Aim for areas in which minimum impact delivers lower-value cost savings. Cost savings initiatives which operate from this principle tend to be more successful, as they aim to streamline, integrate and eliminate extraneous or obsolete functions.

Consolidation

Incremental cost savings approach the project by looking at ways non-mission-critical expenses can be reduced.  If your company holds training days, find ways to combine these with seasonal celebrations. One event costs less than two.

Another consolidation effort is in personnel.  We all know this is true – that every company is home to employees who aren’t as busy as they might be.  Underperformers who’ve made it through previous cost savings efforts can be given more to do and the duties of roles left vacant to spare payroll can be divvied out to them.

Procurement

Procurement is a key area in which superior cost savings can be had through enhanced efficiencies.  One of the most effective ways to achieve that is with a Group Purchasing Organization like CenterPoint.  You join with other members to enjoy bulk discounts and major savings.

CenterPoint Group is your best bet for cost savings in 2018.  Contact us.

The post How to Increase the Effectiveness of Cost Saving Initiatives in the Second Half of 2018 appeared first on Centerpoint.

source https://centerpointgroup.com/increase-the-effectiveness-of-cost-saving-initiatives-in-2018/

Have you performed an RFP for your MRO recently?

The Request for Proposal process tends to be a drawn out one.  There’s much to do in defining the scope of the job on offer, as well as its technical requirements and detailed requests for contractor/vendor information.

But when you’re readying an RFP for Maintenance, Repair and Operations, you’re dragging a rock uphill.  At least, that’s what it can feel like, due to the complexity of MRO.

And once you’ve successfully navigated your RFP, having fully articulated your needs to prospective contractors and vendors, are you any closer to the goal of project satisfaction?

Have you performed an RFP for your MRO recently?  We’re willing to bed you haven’t. But if you have, you’ll know that it’s a time-consuming process with results which are often mixed.  It’s also likely that you’ve yet to run an RFP that has you spiking the ball in the end zone, right?

Let’s look at some the reasons RFPs for MROs go sideways and how you can kiss the process goodbye.

On the defensive

The very nature of the RFP process, regardless of sector, is that it places you in a defensive stance.  You issue RFPs as “sniff tests”, designed to protect your organization from the possibility of loss and risk.

You’re not reaching out to like-minded organizations who share your values.  You’re reaching out to find the least risky prospect. While self-preservation is a human instinct, it can kill creativity in your organization, by denying it partnerships which are mutually beneficial.

While you need to protect your interests, you can sometimes miss the forest for the trees if that’s your sole focus and too often, it is with RFPs.

Consensus decision-making

While consensus in decision-making is a desirable and noble goal it’s also clear that this style of arriving at a decision is fraught with peril.

Consensus means everyone agrees.  Everyone. Think of the movie “12 Angry Men”.  While it may be a dramatic analogy it’s also instructive, as the jurors in that film certainly took their time.

An RFP is intended to find you the right stuff to get the job in question done.  When that’s what you’re going for, then isn’t it best that you obtain said “right stuff” as efficiently as possible?  If you want to get the job done, that goes without saying.

RFPs – on the way out

Take a quick tour around the interwebs and you’ll notice that there are more and more voices being added to the growing anti-RFP chorus.  There’s certainly a vocal contingent of people recognizing this traditional process as having reached its expiry date.

Companies are beginning to understand that work deriving from RFPs doesn’t stick.  Those who issue them tend to be obsessed by the process itself. And on your side, you’re reading this because you’re casting a jaded eye on the effectiveness of the RFP process, yourself.

A better way to procure

CenterPoint Group is a trusted procurement advisor.  We’re a better way to procure because we spare you the pain of RFP for MRO.  Contact us.

The post Have you performed an RFP for your MRO recently? appeared first on Centerpoint.

source https://centerpointgroup.com/have-you-performed-an-rfp-for-your-mro-recently/

Don’t Waste Time Running a RFP – use a GPO

RFPs are rapidly becoming the old way of doing things.  As more companies give these time-consuming, tedious processes the side eye, GPOs (Group Purchasing Organizations) are coming into their own as a better way of doing procurement.

Sure, we’re biased.  CenterPoint Group is a trusted procurement advisor (also known as a GPO) that eliminates the need for human resource-heavy RFPs.

So, don’t waste time running an RFP – use a GPO.  Save time, frustration, people power and less-than-stellar results by going with someone like CenterPoint.  Let us convince you!

A better use of resources

Joining a GPO presents amazing benefits to members and one of the most compelling is an improved deployment of resources.

Because CenterPoint works with the pooled resources of its members, we represent colossal buying power.  With $850 million of collective indirect spend at our disposal, you get pricing that’s usually reserved for large scale players.

The legwork is done

The fact that an effective GPO like CenterPoint can achieve the cost savings your desire is well-established.  But direct cost associated with the items you’re procuring is just the beginning.

You save money on the legwork associated with finding the right vendors and products for your supply chain.  GPOs like CenterPoint perform the market analysis, RFP, contract formulation and negotiating. Creating the procurement conditions of your dreams are achievable in weeks instead of months, with a GPO.

Beyond group purchasing

Getting the price breaks only big buyers usually get is great, but CenterPoint offers you more.  We’re data-based procurement professionals who offer you analytics, focused account management and reporting that keeps you abreast of changes you need to be aware of.

While we’re doing all that, your procurement professionals are freed to move their operations to a category-based model that’s more finely-tuned, offering you an even more advantageous position when purchasing your daily needs.

And members enjoy a unique networking opportunity, which creates a forum for the exchange of information and ideas to make even more of procurement than your GPO already does.

Low-risk.  High-value.

If, like many other companies out there, you’re looking for ways to rid yourself of the tiresome, labor-intensive RFP process, then CenterPoint is ready to share with you the magic of the GPO.

Seriously.  Don’t waste time running a RFP – use a GPO.  This is a low-risk, high-value proposition that more fruitfully deploys your resources – both financial and human – while netting you superior pricing and the opportunity to create even better opportunities for your supply chain, with enhanced knowledge.

Get the CenterPoint edge

For a decade and a half, CenterPoint has been working with companies like yours to improve their procurement practices.

Our team comes from the procurement arena and boasts extensive data management expertise.  The three pillars of what we do are concise – value, leadership and integrity. On those three pillars stand our effective, data-informed model for bringing you a strong, reliable supply chain than saves you money and keeps your business ticking along like a well-oiled machine.

Ready to jettison RFPs?  Contact us.

The post Don’t Waste Time Running a RFP – use a GPO appeared first on Centerpoint.

source https://centerpointgroup.com/dont-waste-time-running-a-rfp-use-a-gpo/