5 Important Considerations for Consolidation

November 11, 2014 Staples Advantage

As we move into the last few months of 2014 and into 2015, many organizations are taking one last look at their supplier lists in preparation for next year’s budget. While it’s important to evaluate the quality of each supplier or potential supplier, quantity is becoming increasingly more important. According to The Hackett Group, world-class organizations rely on 55% fewer suppliers than typical companies, taking advantage of the full capabilities of selected suppliers and leveraging their total program spend in a way that saves time and money.

Slimming down your supplier list can seem like a daunting, risky task, but there are a few tips that can help you evaluate and consolidate your vendors and get great results.

Go by the numbers – When evaluating your suppliers, it’s important to be able to use accurate side-by-side comparisons. Scorecards, supplier-generated reporting and other data can easily be compared, giving you a clear, objective picture of your programs.

Supplier Consolidation

Learn more about whether supplier consolidation might be the solution to your supply challenges.

Set expectations early – Before you consolidate suppliers, set expectations and be clear about your needs to ensure the remaining suppliers can meet your requirements and set Service Level Agreements accordingly.

Use regular reviews – Routine reviews of your suppliers and regular communication with your supplier points of contact can generate the data needed to evaluate on an ongoing basis and give you clearer insight into how well the consolidation is working.

Communicate for compliance – While you may have a bird’s eye view of your program, supplier change and consolidation may not always make sense to your organization’s end users. Thorough, proactive communication can outline the benefits of consolidation while also opening up the lines of communication for ongoing feedback from the user community.

Keep your options open – It’s always nice to have alternatives, and while fewer suppliers can mean bigger savings, keeping lines of communication open with alternate providers can give you peace of mind and a go-to solution in case of any challenges or issues with a primary provider.

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