Thoughts Archives - SpendEdge

London: SpendEdge, a leading procurement market intelligence company, has announced the launch of its Global Facilities Management Services Category – Procurement Market Intelligence Report.

Facilities management services play an indispensable role in ensuring the seamless functioning of an organization starting right from managing storage spaces to physical office areas. The top facilities management companies are being observed to integrate web-based technological platforms in their services that are providing a considerable impetus to the category feasibility. Buyers, as well as service providers, are developing a penchant for integrated facilities management services that are further driving the category spend momentum. Facilities management services command a significant share in an organization’s annual budget which typically overrides their allocated budget because of multiple organizational factors. This is emerging as one of the most recurring procurement challenges faced by buyers related to the facilities management services category. With a view of such potential challenges, this facilities management services procurement research report has made suitable recommendations that have aided some of the leading brands in achieving considerable cost-savings while procuring this category.

According to this report, strategic selection of the facilities management companies and a subsequent supplier base consolidation have been determined as some of the key strategies to optimize the procurement spend while maximizing the efficiency of the services. On a broader note, buyers are recommended to partner with service providers that have a portfolio of a wide range of services. This will exempt buyers from incurring excessive procurement spend on separate service providers while also minimizing the multiple-contract related complexities. Viability of facilities management companies must also be evaluated based on their data management and analytical capabilities that will play fundamental roles in determining the demand and the subsequent procurement of a wide range of services.

“Partnering with such service providers will facilitate better maintenance planning, budget forecasting, and long-term category planning activities,” says SpendEdge procurement expert Tridib Bora. (more…)

Manufacturing a product isn’t the same as it was about ten years ago, and it will continue to evolve. Today’s fast-paced business world is advancing to such an extent that business leaders must choose to consistently adjust to new emerging strategies to be at the top of the competition. Consumer packaged goods (CPG) manufacturers are under intense pressure to deliver quality products while keeping costs down. The push to globalize to meet customer demand, coupled with increasing mergers and acquisitions, makes it almost impossible for CPG companies to cost-effectively manage the quality of ingredients and materials across the supply chain. Supplier quality management (SQM) is a critical activity that relies on suppliers in the provision of the goods or services. It involves managing, monitoring, and responding to the changes in the supplier’s ability to fulfill customer’s needs on time and to meet the agreed quality specifications. Here are some best practices that will help CPG companies to streamline their supply quality management better:

#Supplier quality check 1: Measure and track cost

If a product quality issue arises, it is often the parent company who bears the cost of poor quality, even though the fault may lie with a supplier. These costs can consume a significant portion of revenue, yet many companies fail to measure and track them in a consistent manner. This results in companies shelling out a bomb on poor quality every year, without knowing where or how to recover these costs. Companies must find out how much it costs to manufacture a good quality product. An appropriate ‘cost of poor quality’ metrics can also help to calculate supplier charge-backs accurately, and recover expenses faster.

#Supplier quality check 2: Set up a cost recovery system

Agreeing on a cost recovery process with the suppliers can boost accountability throughout the supply chain. It may allow CPG companies to recover the cost of poor quality from a supplier with much more ease, and encourage them to look at and address issues that are causing poor quality quickly and efficiently.

#Supplier quality check 3: Supplier audit

Supplier audit is one of the key factors that will aid in ensuring supplier quality of CPG companies. Businesses can come to a consensus with suppliers on a procedure for a quality check against non-conformances in manufacturing, quality, service provision, compliance, etc. Audits will help companies identify areas for improvement and help ontake corrective actions, response and resolution processes, and targets. It will ensure that the supplier quality meets the desired standards.

#Supplier quality check 4: Build supplier relationships

Tracking supplier quality is not just about avoiding costly recalls, penalties, and lawsuits. It also aims at generating significant value for the business by strengthening overall product quality, enhancing the company’s reputation and credibility, lowering costs, and driving superior business performance. Companies must treat the suppliers as an extension of their enterprise and not a separate entity. Quality standards, audits, and other processes must be enforced with the same rigor and commitment in the supply chain as in the rest of the organization.