// DIRECT SAVINGS
We at V-LINE understand that achieving cost savings will always be one of the most important objectives in the role of procurement – and it’s hardly a surprise. In most organizations the percentage of revenue spent on procurement in recent years has grown to between 50 and 70%.
Direct savings are related to the actual cost of a material being purchased and are often determined based upon historical prices in comparison to the status quo market price. Lacking material master data sometimes drives companies to determine savings opportunities through different models and/or calculations. This often leads to generating a ‘theoretical’ saving by procuring from the lowest quoting bidder.
V-LINE lowers your TCO and helps you meet savings targets.
At V-LINE, we always use perspective direct savings as part of lowering the TCO and therefore contributing to the overall value proposition. When partnering with V-LINE, we work hand-in-hand with companies and specific departments to help them achieve their direct savings targets on a daily basis, thus complying with company policy/strategy and buying against better product prices.
Savings opportunities identified through data-driven analysis.
Cost savings initiatives must be based on a solid spend analysis. This serves as a starting-point for identifying saving opportunities and as a benchmark to verify claimed savings. In this analysis, different kinds of data are gathered, including: spend, number of suppliers, spend per supplier, spend per cost center and G/L account, comparison of measured values with benchmarks, and so on.
The identification of saving options is carried out per commodity and preferably in interdisciplinary teams to ensure involvement of the different stakeholders. Identified alternatives are analyzed to determine the savings potential (quantitative) and impact (qualitative). The outcome of the analysis is used to set priorities and to decide on the implementation of saving initiatives.
AT A GLANCE
What you get:
- Accurate, data-driven cost savings initiatives that identify savings opportunities
- A partner to help you meet direct savings targets
- Procuring against better direct pricing provides an overall saving to the buyer and department
- Meeting overall procurement targets
- Achieving lower Total Cost of Ownership