Reviewing suppliers is a challenge for every business, how to put in place an efficient yet invaluable review of trusted suppliers.
Often savings in themselves are not the sole reason for making a decision – you have to consider the associated costs of transitioning to a new supplier, in time and familiarity.
The secret to addressing suppliers is that you want to have an incremental approach to this. If you were to review every supplier at once, then the exercise could be overwhelming, not to mention destabilising. But, if you had a process in place to address your top five suppliers first, then the next five and so on, you may find that the savings or gains in what suppliers offer you to keep your business can have a significant impact on your bottom line and competitiveness.
This is a good exercise to delegate to your office manager or bookkeeper. Remember for every dollar of overhead you save it has a multiple effect in reducing your break even. i.e save $1 and lower your income breakeven by up to $5 or $6.
Now that sounds like an exercise well worth doing.