Tail spend accounts for roughly 20% of an organization’s budget. Find out how to save time and...
Year Over Year Savings Through Product Standardization
An organization often relies on multiple manufacturers and suppliers to satisfy the same set of fit, form, and function requirements for products used in production. Ensuring that the correct products are being used in a company's production lines can be costly, especially when it's sourced from multiple vendors.
Procurement Solutions and Product Standardization
Hydraulic oils are products that all manufacturing operations use to some degree to keep their machines running optimally. Many plants will have their preferred brands based on past experience and local representation of the distributor.
Not long ago, DSSI presented one of its long-time clients with an opportunity to reduce costs through a multi-step process aimed at the standardization of the client's hydraulic oils.
- Our Team supporting this client engaged to first understand the current situation including the products being used and the usage patterns.
- Purchasing Managers then began working with our preferred supplier in the Lubricants category and the supplier’s local reps were asked to work directly with the plants to understand the application and what the proposed products would be.
- Once this process was complete, the supplier came back to DSSI and the customer with a proposed standard product that would meet the needs of each of the plants and drive cost savings going forward. Where a new product was being introduced to a plant, time was allotted for testing and analysis to ensure optimal machine operation.
This entire process took a mere two weeks, generating a total of $90,000 in annual savings!
How DSSI Supports Product Standardization?
DSSI is able to work collaboratively with suppliers and plants to find the lowest total cost across the entire indirect materials landscape. DSSI works as an extension of its customers' centralized procurement teams to put in place sustainable cost savings initiatives that act as a foundation for an optimized indirect procurement strategy!