Our Cost Management Process Explained
- 1. Three Stages Successful Cost Management
- 2. Steps for cost reduction planning
- 3. IncludesDevelop an overall cost-management strategyDevelop cost-reduction goals for each categoryIdentify the project team (internal & external)Detail profiling of current purchasing pattern and processes including a service/quality level auditSupplier/Vendor identification & interviewsFully managed Tender/RFP processSummary of saving opportunity and recommendations
- 5. IncludesImplementation of Cost Reduction PlanMonthly monitoring of supplier performance by priceMonthly monitoring of supplier performance by serviceMonthly monitoring of market conditions & protection against unjustified price adjustmentsInvoice accuracy & billing error correctionMonitoring & correction of internal buying habits/processes (including staff training if needed)
- 6. IncludesQuarterly category reviews with supply audit report presentationAudited procurement processes documented in supply reports to demonstrate best practiceAudited actual savings quarterlyOngoing purchasing advice & guidance to staff
- 7. Ongoing Monitoring and Procurement management
- 8. IncludesDevelop an overall cost-management strategyDevelop cost-reduction goals for each categorySet expectations for each person who will participate in the cost-management processSet a timeline for resultsRegularly monitor supplier performance against agreed targets and the marketRegularly monitor staff purchasing habits Audit savings on an ongoing basis
- 9. Expense Reduction Analysts700+ Consultants in 30 countries negotiate terms and pricing with hundreds of suppliers every year.Our world-class category experts specialise in dozens of common overhead cost categories.We’ve completed more than 14,000 cost- reduction projects in the last 15 years – average savings across categories is 20%.www.expense-reduction.co.uk
- 10. Three Stages to Successful Cost Management
- 11. 11For more information contact:Frank M. WeberPhone: 0845 458 8506Mobile: 07770 44 22 00Email: f.weber@erauk.net
Editor's Notes
- #3: So, what are the steps for expense reduction planning?
- #5: Leverage their platforms for ordering and managing informationCan they track purchases by department and provide invoices already allocated to departments to ease the work of your Accounting Department?Can they inform you if employees do not follow established business rules, e.g., buy off-contract?
- #8: What products and services do you buy.From whom do you buy them. How and when did you last competitively bid out these products and services.What internal expertise and time have you spent addressing particular cost categories,e.g.:Office Supplies Merchant Card Processing Fees Telecom Insurance Records Management Printing ● Etc.