Boost your profits with effective supplier negotiation

Used properly, supplier negotiation can help save between 5% and 20% on product cost. Combined with the fact that a 5% reduction in product cost can generate an 85% increase in profits, it really highlights the necessity for companies to master their supplier negotiation process.

However, the more complex the product, the harder is to retrace its entire supply chain, and the harder it is to clearly assess prices and compliance risks. It is also harder to find good alternatives that fit the product requirements. At the end of the day, procurement teams must keep track of a lot of requirement that adds up on top of costs, with very little leeway to protect their margins.

So… how can you manage the ever-growing list of requirements while increasing your margins?

Well, it all starts with fast and standardized should-costing, smart product data management, and effective supplier collaboration tools.

A fast and integrated approach

Unlike the majority of systems available on the market, Makersite provides an integrated approach to should-costing and supplier collaboration, allowing teams to see the big picture and make better decisions, faster.

Over the last 3 years, we have worked with several customers across various industries such as cosmetics, packaging, construction, and electronics. Overall, our users reported a 10% reduction in time-to-market as well as a 60x time reduction on should-costing analyseswith an accuracy of >95%.

How it works

Thanks to intelligent data integration, live data feeds, and AI-powered suggestions, getting started to seeing results only takes 3 easy steps: import, mapping, and analyses.

With a simple BOM, procurement teams can easily set up a standardized, repeatable costing process. The easy data management system and built-in collaboration tools make it easy to interact with current and future suppliers. From fast should-costing, compliance checks to effective supplier negotiation support tools, procurement teams can find all they need to boost their processes.

Actually, Makersite helps procurement teams quickly understand what non-standard components/custom components should cost as well as identify suppliers that can deliver to requirements, even from early designs. This enables the teams to have informed conversations with suppliers early in the buying process. It also helps them supporting designers with reliable early estimations of their designs, significantly reducing development cycles. Prices, regulations, technologies, and supplier’s data are updated in real-time, enabling teams to identify and capitalize on opportunities faster than ever.

Teams can also improve supplier negotiations, support make/buy decisions, and capitalize on process-based cost reduction opportunities. Thanks to proprietary data and algorithms, this process which typically takes months to complete per product can be done with >90% accuracy within seconds.

Finally, teams can compare designs using a multi-criteria approach based on proprietary data and stakeholder/customer research data acquired through direct surveys. Teams make better decisions faster about what ingredients to use, where to source them from to maximize benefits and minimize risks and costs.

Andreas Cords, Grob Aircraft – “The ability to find alternative suppliers and should-costing our components instantly is extremely helpful to our business”.

Boost your profits with effective supplier negotiation

As we said earlier, even the smallest percentage of saving on product costs can result in a significant profit increase. The increasing challenges of navigating worldwide supply chain networks and rapid market changes created a highly competitive environment where driving cost down is a necessity. If it used to be a synonym of quality struggle and potential compliance catastrophe, cutting cost is now way easier and safer thanks to the current advances in big data and AI algorithms.

With Makersite, it is even easier to start increasing your profits while keeping an eye on the associated risks. So if you would like to see how Makersite can help you improve your product costing, visit our solution page for more details.