A manufacturing company has 3 separate departments purchasing stationery. Department 1 buys it from a local supplier, department 2 buys from a national supplier, department 3 shops around and buys from whoever offers the best prices. There are up to 10 different stationery suppliers set up on the system. The product range is extensive, prices vary for similar products and delivery charges are frequently applied where order quantities are below MOQ. Orders are placed on an ad-hoc basis, so the finance team are processing multiple invoices and payments and are continually dealing with price queries.

By looking at the procurement of stationery across the whole of the business, the process can be simplified. By involving all stationery stakeholders, a much reduced and common product range with a standardised specification can be agreed. The consolidated volumes can then be purchased from the supplier offering the required specification of product at much more competitive prices. The intangible benefits of this process are reflected in the time saved shopping around, a reduced number of POs, consistent prices, fewer and quicker processing of invoices.

Of course, this principle can be applied across all spend areas in a business…