There are several areas that can be addressed to lower process costs, and ** prides itself on having staff who are knowledgeable enough to act as consultants in the area of cost reduction.
One well-proven vehicle for reducing costs has been our Internet ordering solution. We have tracked two major indicators and received customer feedback indicating that Internet ordering has created substantial improvements in their process costs. The first indicator involves backorders and fill rates. Because customers can research live, in-stock inventory while ordering, effective buying decisions can be made immediately. There are no surprise backorders to waste your buyers' time. Surveys of our customers estimate that they save an average of $85 per order in processing costs by placing their orders on-line rather than by fax or phone.
The second area in which we have been able to produce improvement is adherence to the core contract list. The ** Internet solution "flags" the contract item for the requisitioners during the product searches, so they are prompted to select contract items, thereby receiving the best price available.
The core contract list is also evaluated at our periodic business reviews (typically quarterly for a customer of your size). We are able to produce detailed usage reporting, which would allow *** to ensure that those items on your core contract, the items for which you receive the best price, are actually your highest usage items. These business reviews may also be used to explore additional cost containment options, such as migration of purchases to lower-cost options.
Additional cost savings are provided in conjunction with *** core item list. We have provided a suggested alternate item list where applicable for additional savings off your core item list. Additional savings on these specific items will be approximately $27,883.
Please see Attachment D at the back of this RFP binder.
