By M. Graham Brash
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These approaches and their underlying methods are briefly described below. Integrated operations planning Rather than achieving direct reductions in a component price, integrated operations planning tries to achieve targeted savings by decreasing inventories and making sales forecasts more reliable which in turn improves the capacity and demand balance. The supplier and customer collaborate in a spirit of trust and exchange information with one another, often supported by internet applications.
E. permanent collaboration with a partner, are appropriate where a company does not wish or is not able to maintain certain strategic capabilities internally, or has no possibility of vertical integration. An average buyer may have simple methods such as tendering, volume bundling, and multi-year contracts at his fingertips. An outstanding and highly experienced buyer, on the other hand, can draw upon 10 to 15 different methods for cutting costs and increasing value with regard to suppliers. However, as this book shows, there are no less than 64 independent methods of this type!
The resulting figures provide a basis on which purchasing can negotiate processing costs directly with the supplier. Re-specification Many of the costs of a product are already determined in the early phases of its development. If one cannot reduce cost within the scope of existing specifications, there is only one thing to do: go back to the drawing board! The obstacle in this case is to get the creative process going again. After all, there was good reason why the product was designed the way it was.