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Resources Blog 3 Ways Using a Procurement Solutions Group Cuts Costs

Over time, OEMs often find they have acquired a large supply chain that can be challenging and time-consuming to manage. One cost-cutting measure is to consolidate the supply base into a handful of strategic partners.  When partnering with a procurement solutions group, such as Chainlogix, customers receive a complete manufacturing solution that strengthens and diversifies their supply chain.  Additionally, since every step in the manufacturing process builds upon the next, it is cost-effective to partner with a provider that can start and end the project with you – from the concept and design phase through production and distribution.

There are many benefits to using a procurement solutions group to optimize your supply chain. Outsourcing responsibilities allows OEMs to tap into experts that can tailor a solution to meet their specific needs – the result being a more cost-effective and reliable supply chain. Below are 3 ways that using a procurement solutions group cuts costs.

1. Reduce Labor Costs

Procurement activities are often time-consuming and require significant OEM personnel to manage the various supplier relationships. By partnering with a procurement solutions group, like Chainlogix, OEMs can focus their in-house resources on core business competencies and more value-added work. Additionally, procurement solutions groups connect OEMs to the right suppliers that have the facilities available and the resources and processes in place that enable completion of supply chain operations more efficiently. For these reasons, outsourcing supply chain activities results in lower labor and overhead costs for OEMs.

2. Cut Inventory and Warehousing Costs

Once teamed up with a procurement solutions group, OEMs not only tap into their partner’s supply chain expertise, they also get to take advantage of their network of inventory and warehousing facilities – reducing, or in some cases eliminating, the need for OEMs to use their own floor space for these activities, leading to lower inventory and warehousing costs.  This is a huge advantage of outsourcing supply chain activities and allows OEMs to utilize their space and cash flow for other purposes including production growth opportunities and new business ventures. Additionally, there are other efficiency gains and cost savings from working with a procurement solutions group. For example, the ability of suppliers to buy in bulk allows economies of scale that are not possible when OEMs perform supply chain tasks in-house. Also, procurement solutions groups are experts in the various supply chain tasks such as purchasing and inventory management. Thus, these processes are streamlined and occur more seamlessly when outsourced – increasing operations productivity, leading to lower costs and faster time to market.

Could your team benefit from a more reliable and optimized supply chain?  
Contact Chainlogix to learn more about our diverse and customizable procurement solutions.

3. Gain Purchasing Power and Scalability

By consolidating your supplier base and using a procurement solutions group and their supplier network, you will gain purchasing power that will yield cost savings. This can be in the form of negotiating lower manufacturing and transport rates due to higher annual spend, or lower raw material expenses due to more volume purchased.  In addition, partnering with a procurement solutions group provides more scalability. Since suppliers can more readily scale operations, OEMs are able to adjust production as necessary to respond to demand changes and market conditions. And the additional nimbleness in manufacturing is achieved without sacrificing quality or time to market – resulting in higher customer satisfaction and repeat customers.

 

 

About Chainlogix

Since first opening its doors in 1988, Chainlogix has been an industry leader in creative, engineered solutions for manufacturers. Our highly experienced supply chain professionals assist in every step of the manufacturing process, from design to production of quality products. Through our strategic partnerships, firm commitment to unsurpassed customer care, worldwide sourcing capabilities and offices in the USA and China, clients achieve a sustainable reduction in their total acquisition costs and build supply chain resiliency.

At Chainlogix, we’ve spent years cultivating relationships with proven suppliers and securing the most competitive prices for our clients.  We proudly offer the best custom-tailored solutions in the business, and with exceptional customer care that places a high emphasis on human relationships and human connections.

We serve clients across a broad range of markets including industrial and consumer electronics, industrial machinery, telecommunication, lighting, and construction.  Our services encompass all areas of the procurement process such as:

Contact our team today at 833-874-6635 to see how we can help with your supply chain management.