How to reduce office supplies costs in 2017
A new year brings fresh challenges and 2017 is no exception; Brexit looms large yet unclear, the pound is weakened, and industry price rises have reached nearly 7%. The need to keep office supplies costs in check is obvious.
But the New Year is also a great opportunity to review, revise or implement new cost reduction strategies — before it’s too late. So if you are facing price increases, or you need to keep a tighter rein on spending, here are five steps to reducing your office supplies costs in 2017.
- Know what you’re spending
You’d be surprised how many organisations don’t have a clear picture of their office supplies spend or whether they are paying over the odds.
Conduct a thorough audit of the items, cost, and consumption, of products used by your business. Understand which items are essential and which are occasional and how this affects pricing. A good audit will highlight unnecessary expenditure and areas for improvement.
By gaining visibility of your office supplies usage it will be easier to; eliminate wasteful spending, encourage reduced consumption, and promote cost efficient ordering. In addition the knowledge will enable better negotiation with suppliers.
2. Challenge your supplier
When was the last time you had a proposal for cost reduction from a supplier? Or heard about a new innovation or product swap that is a better or cheaper solution than your current product? Have you had notification of price increases?
Office supplies are a highly competitive industry, with the pressure on to keep prices down. Suppliers will often quote low prices to win a contract, and then gradually increase pricing over time or charge inflated rates for non-core items. This is standard practice across the industry, so it’s important to review loss-leaders and check a range of product prices regularly.
One of the services we provide for clients is supplier management, which includes monitoring pricing and value. Therefore you can still ensure compliance if you don’t have the time to manage multiple suppliers or attend regular contract review meetings.
3. Consolidate purchasing
Consolidation is undoubtedly an effective means of cost reduction. Many suppliers now offer multiple categories, from stationery to furniture and print management, and there are clear advantages to reducing supplier numbers:
- Reduced direct costs and improved buying power with your supplier
- Reduced indirect costs as a result of less invoices and deliveries
- Increased visibility and control of expenditure
Overall consolidating suppliers improves business efficiency; through improved time management, reduced costs and simplified processes, and can benefit your environmental impact. We also oversee the consolidation process for clients, identifying the products and services in scope, sourcing a relevant supplier, and handling all price management and implementation.
4. Use a cost consultancy
Okay, I am obviously biased… After 30 years working in the office supplies industry I genuinely believe that using a cost reduction company will help you to reduce costs! But more than that, a consultancy will help you to achieve sustainable value. It is the reason I set up my own business focusing on delivering long term value, compliance and innovation.
The fact remains that many large multi-sited organisations simply don’t have the time to spend proactively managing office supplies contracts — something that is required to ensure that costs remain low throughout the contract term. A consultancy will achieve this and, if you choose a niche consultancy, you will also benefit from 100% impartial advice and many years industry expertise.
5. Provide staff training
Companies often save money successfully only to find subsequent costs higher than expected. This is usually due to rogue or off-core ordering; with a variety of RRP’s in the industry pricing and order management is essential. Staff training is especially useful in this instance for large organisations where purchasers are located across multiple sites.
As a unique consultancy we offer our knowledge to carry out any necessary staff training in purchasing and sourcing. Ensuring a robust order process and getting staff on board with contract compliance is crucial to achieving long term savings.
Get ahead now
If you don’t have the time to identify or implement cost savings, consultancies such as Red Herring can help. A New Year is the perfect time to kick start initiatives that will benefit your business for the year ahead. Get in touch today to book a meeting.
Red Herring is a niche procurement consultancy: we help businesses to spend smarter and spend less on a wide range of office supplies and services. Our services will bring your business long-term cost reduction benefits, supplier compliance and improved processes. Contact us today.
Originally published at www.redherringbusinessservices.co.uk.