ANYO Passive Electronic Components Vendor Consolidation Service For Saving Time

Vendor consolidation service for passive electronic components

Vendor consolidation service is a value added service provided by ANYO in which several shipments are combined and shipped as a single shipment to benefit from better shipping rate.

At the request of one of our customer, a major electronic components distributor in Turkey, we ANYO agreed to partner and assist the company on a major vendor consolidation effort. There were multiple reasons cited for pursuing this endeavor, but maintenance and labor costs were among the primary factors.

By moving the daily management of over 40 suppliers to ANYO, the customer was relieved of the costly burden of day-to-day processing and management concerns.

Description:

Vendor consolidation is a supply chain management strategy that aligns with the common goal of procurement, cost reduction. It involves reducing the number of suppliers a company does business with, in the belief that vendor consolidation is cost effective and improves operational efficiency.

Vendor consolidation gives companies the economies of scale to lower procurement, administration and delivery costs, improve supplier quality, mitigate risks and strengthen supply agreements. It’s a continuous process and one that produces significant cost reductions.

Choose to procure products and services from a small pool of trusted suppliers allows companies to build stronger and more cooperative relationships with suppliers, which often translates to better business outcomes. Vendor consolidation also brings about reduced procurement and operating expenses and soft costs. These outcomes not only result in cost savings in supply chain management, but include a host of other plus points. When carrying out vendor consolidation, not only is it important to select quality suppliers, but also suppliers who are ideally, closest to your operation base. This is because bulk orders translate to higher inventory costs, which can eat into your business’ gross profits significantly. You can lower freight charges by shipping in larger volumes, which consequently reduces the cost of goods sold (COGS), thereby improving your gross profit on sales. However, lower freight charges aren’t just about purchasing more than you can afford to hold. Rather, it’s about achieving that delicate balance between procurement volumes and inventory management, which is a big part of supply chain management.

What is soft costs?:

Hard costs from product purchases are obvious and easier to measure, being direct costs on which we can put a price tag. On the other hand, soft costs such as cost savings from paying fewer bills and managing fewer suppliers – although intangible – can have significant impact on your business and must be taken into consideration as well.

When considering vendor consolidation, think of reducing your vendor base to a select few. Choose a provider that will help reduce supply chain costs through standardized processes. Choose a platform that leverages quality data to help you make better decisions for organizational success. ANYO is here.