Our approach
Non salary costs including fringe benefits can range from 5% to 35% of an organization's cost base. Most organizations manage their costs well but often wonder if there is any remaining hidden value. Many core spend categories are unique to the organization. When advising organizations, we often find variations in their approach and philosophy in managing their non-salary costs. Incremental value is typically identified using a best in class approach which considers the unique needs of your business.
Do you have an overall approach or strategy that considers the unique aspects of your business? Key points and considerations often discussed with clients include:
- Is incremental value a consideration and a priority?
- Are you looking for the best value or is all about price?
- How do you measure value in the value equation?
- Is service the main driver in the value equation?
- Does your current thinking and process assist or hinder your effectiveness?
- Are your limited resources being employed to the optimal areas?
- Do you engage with your supplier partners in a fully transparent process where you both share in the risk and reward of better management and intellect?
- Do you continually beat up your supplier partners to the point where service suffers?
- Do you leave your management and strategy in the hands of your GPO? If so - who is effectively managing your GPO?
- Are you able to effectively benchmark service and pricing levels and how is that factored into your strategy?
- How do you manage your commodity based items in an inflationary or deflationary market?
- Are RFPs the best approach in identifying value?
- Are spend categories actively bundled or unbundled into master or minor categories?
- Are process improvement ideas discussed as added value opportunities along with price points? Are your suppliers involved with this discussion?
- Do your suppliers need to be involved with this process and if so how would it affect value?
- Is the right sizing of service levels and waste considered in the value equation?