Why consolidate vendors

Are you constantly spending time ordering supplies for your business? Do you find yourself ordering from multiple websites or shopping at wholesale clubs to source all the products you need to keep your business running? If you fall into either one of these categories, it may be time to consider vendor consolidation.

This cost-saving strategy offers a wide range of benefits, from helping your business save time ordering supplies to reducing your overall supply costs.

Here at Egyptian Workspace Partners, we realize the search for a new office supply vendor is anything but easy, which is why we're here to help you find a supplier that can provide you with everything you need to operate your business successfully.

In this article, we'll break down the benefits of vendor consolidation. We'll also help you understand what vendor consolidation is and how it can help your business say goodbye to wasted time, money and multiple vendors.

Vendor consolidation or supplier consolidation is a supply management strategy that has risen in popularity over the last decade. To put it simply, it's the process of reducing the number of vendors you order from to just a small group of reliable vendors or even a single partner.

For example, let's say you order your office supplies from a big box store like Office Depot or Staples and you regularly pick-up office supplies from local brick and mortar stores in your area. On top of that, you may use a local janitorial supplier for your paper and soap products, order toner from a company that specializes in that product and buy from a local wholesale company for coffee, cups and other breakrooms with occasional Amazon orders sprinkled in.

Ultimately, the goal is to consolidate as many of these categories into purchasing from one company to help you save time and reduce your costs. As a business owner, your accounting department is a valuable asset to your company, and the last thing they want to do is waste time stuffing, mailing, collecting or reconciling checks for multiple vendors every single day.

When it comes to vendor consolidation, there are two factors that drive the cost of supplies. Hard costs refer to the price you pay for an item, while soft costs are the internal costs you pay to procure an item. Try it free for 14 days. It may be difficult to identify when a business is utilizing too many suppliers. If a company ever gets to a point where they need to evaluate whether or not to go through vendor consolidation, there are some key considerations to remember before reaching a decision.

Focus on Needs The requirements and priorities of the business are ultimately the most important. It is also essential to gain insight from various stakeholders to gauge what their priorities are when dealing with suppliers. For some, it may be more important for them to deliver the goods quicker while for others, it could be about securing the lowest possible price.

Wherever their priorities lie, the different stakeholders that deal directly with the vendors will be able to fully inform decision-makers about their preferred suppliers. Compare Between Current Vendors Some vendors may provide unique services or products that are difficult to obtain elsewhere.

Therefore it's important as a business to create a chart of the company's priorities and see which vendors provide the most benefits. In charting the services provided by suppliers, it's also wise to include the opinions of key stakeholders within the company.

Create a Stakeholder Team Stakeholders play a very large role in the consolidation of vendors. Therefore it would only make sense to create a team comprised of these professionals to act in the best interests of the company. While these representatives may have their own standards that vendors need to meet, the goal here is to get stakeholders with differing priorities into one group to discuss and put into action a plan for consolidating the full list of suppliers.

If it's not a mutually beneficial relationship right now, dropping that vendor from your list. Ideally, you should also appraise potential vendors not just on what they can do for your business today, but how they can help you meet your future goals.

Keep companies with the ability to scale as you do, especially in a global capacity. Many companies that began as just value-added resellers have expanded their capabilities to include a variety of IT services. If large-scale IT transformation, digital innovation initiatives or the integration of emerging tech is in your future plans, look for a partner with holistic end-to-end IT capabilities. This new breed of IT providers, known as a super solution integrator , is a single team with expertise across all aspects of modern IT solutions.

A super solution integrator can provide a full-scope of IT services from procurement and software licensing to solution implementation and management. These days, optimization is the name of the game. Consolidating into a small, well-vetted list will help your business maximize the benefits of working with the businesses that make the cut. Sign up to have the Supply Chain Optimization newsletter delivered straight to your inbox.

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By finding a single partner, you suddenly gain much more buying power and have more leverage to request or negotiate for better contract terms. Many will even offer exclusive discounts or partner benefits for consolidating your orders. You also gain back some of the control you might have relinquished by spreading out those tasks across multiple partners. Consolidating to gain better visibility and enhanced control puts your business closer to that green line.

You build stronger, more productive and more trustworthy partnerships over the long term. A solid vendor consolidation approach is to find a partner you can create such a bond with. With a long-term partner, you can better understand their operations, quality control systems and supply chain connections. This is occurring not just because of the current pandemic, but also because of labor shortages , the introduction of new technologies and an ever-shifting economy.