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Benefits of consolidating vendors

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Then, they discover the benefits of vendor consolidation.They learn how limiting the number of vendors their company works with can make procurement much easier for them.They put it into action and begin to see great results.It becomes easier to manage their vendor relationships. This post will discuss what vendor consolidation is and why your Procurement Organization should consider implementing it.Because of this, it becomes harder for the procurement organization to be as effective as it could be.On top of that, they aren’t confident that they are getting the best rates for their company.Is your procurement organization becoming overwhelmed by the amount of vendors it deals with?

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But what if you assigned each of these responsibilities to a single company that could do it all, for less?Ultimately, it’s about rewarding your business volumes to your best vendors, ones that will reduce your prices, reduce your per-unit freight costs on raw materials, improve your quality and allow you to lower your holding costs of inventory. In itself, consolidating a company’s vendor base is simple.However, it’s wrong to focus solely on the price paid for raw materials and finished goods.When companies think of quality, they immediately think about the quality of the raw materials and finished goods they purchase.While important, it’s equally important to make sure that your vendors’ service quality is up to the task of managing your business and its volumes.Vendor management is critical because your business has a lot of moving parts – all successful businesses do. You can’t be good at everything and that’s just fine.