Some purchasing teams managed to receive a better deal despite inflation-driven price hikes.
Procurement and Supply Australasia (PASA) recently revealed a growing number of businesses responded to the nation’s 7.8 per cent inflation rate by implementing various strategies.
- product upgrades
- reduced product liability rates
- delivering higher quantity ratios
- delivery preferencing over other clients
- innovations and exclusive new product trials
- annual price reviews instead of seasonal reviews
- better payment terms or supply chain finance options
- better services and greater supplier-side work contributions
- higher stockholding by suppliers or larger standby/impress stocks
- targeted environmental, social and governance initiatives and projects
- guaranteed delivery in full on-time rates and improved mean time between failure rates.
These approaches resulted in more savings and better value for money.
“Solving the ‘rising cost/higher value’ challenge can yield real benefits for organisations regardless of category – although it obviously works best in sectors of relatively higher spend and more direct categories. Targeting other sources of value can realise other benefits for your organisation, especially in terms of alignment with business priorities,” PASA CEO Jonathan Dutton said in a commentary.