Expense Reduction Firm Offers Cost Savings Ideas for Office Products & Supplies

(I-Newswire) January 15, 2009 - The purpose of this article is to lay out an overall strategy for generating cost savings in office supplies. Let's start from the beginning, with the assumption that there is very little, if any, office supplies oversight within a company or organization. What are some basic cost reduction strategies and how could they be implemented?

How much are you spending? Without a detailed list of what and how much your company spends in office supplies and products annually it is difficult, if not impossible, to capitalize on efficient purchasing. We recommend that you ask accounting to generate a report. Make sure that this report includes office products that are classified elsewhere, such as in a corporate credit card account. If you spend $10,000 or more annually on office products, you've got negotiating leverage with suppliers.

What products are you buying with the most frequency? Now that you have a list, this should be a simple task. Are they name-brands? Is it necessary to buy name-brand products, or are there alternative, generic products that would work just as well? Exploring alternatives could result in significant savings. Today, the major office supply providers have very high standards for their corporate brands; if their company name goes on the product, they want the best quality representation they can have.

What's Next? Approach suppliers with information regarding what you purchase, the annual quantities you purchase, any seasonality in your purchasing, and any special requirements that you have. I would recommend approaching at least 3 suppliers. Share your purchasing information with them and ask them for a full proposal including: pricing for the items you purchase with the most frequency, information related to corporate-brand products, catalog discount opportunities, rebate or incentive opportunities, rewards cards, information about any potential hidden costs (shipping, fuel surcharges), and copies of any agreement that you would have to sign.

After receiving supplier proposals take some time to drill down looking for best overall value. Keep in mind that low prices on small volume or inexpensive items like pens, pencils and paper are not a good indicator of potential cost savings. It is best to look at the weighted average of the purchases you expect to make. Suppliers need to make money, but if they can plan their own inventory better, they can lower costs for you. This is the efficiency of supply-chain management.

Measure your success. Many companies use a combination of metrics to create a "scorecard" of benchmarks that make sense to their business and can easily be assessed. A popular method is to use statistically sound estimates. Using weighted averages on a representative sample of past purchases to determine a benchmark of savings is practical. This allows the savings to be measured based on the most frequently purchased items, not on every individual item. This method allows for a quick evaluation of savings and refinement of the list of items where purchase price makes a difference to your company.

Consider a cost containment specialist or business consultant. By leveraging their ability to quickly assess, quantify, consolidate, and negotiate new prices you can reap the benefits without distracting your team from higher dollar purchases.

Alliance Cost Containment is a national expense-reduction advisory firm. With over 40 offices spanning North America, ACC's purchasing aggregation and vendor-management processes provide small and mid-sized business & not-for-profit organizations access to the kind of large corporate purchasing power they are often unable to capture on their own. ACC also facilitates detailed vendor management and reporting processes to make sure our clients capture the savings that we help generate. Established in 1992, ACC has served nearly 800 clients nationwide.

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Alliance Cost Containment
940 Monroe Ave NW, Suite 337
Grand Rapids, MI 49503
616-551-3717

Company Contact Information
Nancy Stanton, Principal