Driving savings is the number 1 priority of the CPO, according to recent studies from various consultancy firms. With category management, (strategic) sourcing and negotiations, you learn how you organize your processes to achieve this goal. However, cost management gives you insights into the added values that are at stake.
Understanding the cost drivers and business economics, and how you can determine these factors for a sustainable supply network are important elements that help you manage risk and buy the right value for the right price.
Topics such as profit, (potential) savings, should-cost analysis and TCO are discussed daily in procurement departments. In this block we focus on these themes. We explain how to analyze financial statements, how CFOs look at savings and business contribution. You learn how to read and interpret financial statements of suppliers and learn to use this as one of the inputs for the should cost analysis. Within NEVI we prefer to determine could-cost instead of should-cost.
Applying business economics and cost analysis in your sourcing projects will deliver savings and a stable supply base. Depending on your company’s strategies, you learn how to use these insights to support your business, from savings and bottom line improvements to TCO, circular buying and reducing the footprint. As NEVI, we closely cooperate with What’s The Price (WTP); this company delivers a tool providing you with an immediate overview of the cost price of a product and the elements that define the cost price by entering product characteristics (BOM). Often, cost managementtraining is combined with fact-based negotiation training in order to put the (financial) arguments directly to good use during your meetings with suppliers.
If there is a need for combining these topics, don’t hesitate to call us, we can easily create a customized program that meets your requirements.