PROCESS & UNIT COST OPTIMIZATION
WHY PROCESS AND UNIT COST OPTIMIZATION SHOULD MATTER TO YOU
With increasing division of labor, the degree of specialization in production and R&D rises steadily as well. Hence, the economic success of companies will be more and more dependent on creating added value for their clients – jointly with the right partners.
Procurement plays a key role in this regard, since producing companies purchase 50% of their value added. Thereby, the procurement department drives a bigger part of added value than production – an effect that many companies still underestimate.
YOUR CONTRIBUTION TO YOUR COMPANIES’ COMPETITIVENESS
Procurement integrates the external value creation into the internal value-added process – here is what matters:
- Equipping production with the necessary infrastructure such as machines, facilities, storage, etc.
- Supply of MRO-materials
- Purchase of indirects
- High quality products
- Ensuring competitive prices for own production
- Reliable supply and provisioning - in time, in full
- Maintenance of equipment aiming for a high OEE
ACTIVELY MANAGE YOUR CHALLENGES
In order for the procurement department to avoid becoming merely an order processor, it is vital to manage the purchasing of materials and services strategically and to find, qualify, and develop the right external partners. The objective needs to be to maximize the added value of the partnership for the clients, the company, and suppliers / service providers, creating a win-win-win situation.
For that, transparency is essential and required regarding the specifications of material inputs and services, possible markets, and the optimal partners. Fundamentally, this necessitates accurate and complete master data, master data, master data… in addition to knowledge about purchasing power and alternative sources – especially concerning technological, environmental, and risk-management aspects of procurement.
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Almost all medium-sized and bigger companies have too few resources in their procurement department.
- Procurement will inevitably focus on provisioning production with production materials and investment goods.
- Procuring indirects, MRO-, B-, and C-materials as well as services cannot be managed strategically, even though they account for 80% of transactions and comprise 20 – 30% of the purchase value. Up to 6% of all purchasing costs remain untouched (20% saving potential of 30% of all purchasing costs = 6%).
- Less resources are spent on the innovation of suppliers and service providers. Thus, innovations cannot be used in a targeted way to gain time critical competitive advantages.
The Solution for this is higher productivity in procurement– especially in operational purchasing, needing to free up time for strategic purchasing management. To get started and to avoid overloading the procurement department, temporary external support can be of benefit.
USE GMVK TO INCREASE YOUR PROCUREMENT SUCCESS
We support you effectively as part-time employees because we combine our procurement-know-how of GMVK Procurement Group with Business Intelligence solutions by our subsidiary 4EBIT Software & Services to maximize your benefit.
We deliver in joint projects with our customers:
- Transparency across demand, purchasing power, markets, potential suppliers and service providers to ensure continuous tenderability
- Material and service classification / categorization along material groups
- Development of purchasing and material group strategies for anything from indirects to MRO-, B-, and C-materials as well as services
- Automization of purchasing of recurring materials and services through master data optimization, catalogue management, and the use of innovative software tools
- Empowerment of the procurement department to strategically manage all material groups
- Support in reducing unit costs of up to 20% and process costs up to 50%
- Empowerment of procurement to responsibly steer complex supply chains from a risk-management, ecological, and social perspective
Your contact persons at GMVK
