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Overhead cost containment

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Alliance Cost Containment is the route to overhead cost reduction for the midmarket company.

Alliance Cost Containment is the route to overhead cost reduction for the midmarket company.

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Transcript

  • 1. Cost Reduction Strategies
  • 2. Alliance Cost Containment
    • Industry leader since 1992
    • 42 locations, 72 full time employees
    • Over 1000 clients (Pepsi, Toyota & SYSCO)
    • Annual savings in excess of $30MM or <13%
    • Gain-sharing fee structure: 50/50 for 18 months
    • No billings until actual savings =no risk
    • No net cost, immediate profit improvement
    • Group purchasing and Subject Matter Experts
    • Huge supplier network and national contracts
    • State of the Art web based bid process
  • 3. Goods and Services
    • Break room, Beverage Supplies Office Products
    • Cell Phone Service Overnight Delivery
    • Computer Hardware Packaging/Corrugated Supplies
    • Computer Supplies Paint
    • Copy Machines/Supplies Pallets
    • Copy Paper Payroll Service
    • Credit Card Processing Printing/Forms
    • Electrical Supplies Printer Service
    • Electrical Use Promotional Products
    • Equipment Service Contracts Records Storage
    • Express Mail Safety/ First Aid Supplies
    • Fasteners Service Maintenance
    • Fleet Vehicles & Maintenance Shredding Service
    • Freight-Global/LTL /Courier/Parcel Tax Recovery/ R&D
    • Furniture Telecom –Land/IT/Wireless
    • Gases -Natural, Propane Temporary Staffing
    • Hazardous Waste Uniforms
    • Janitorial Supplies Utilities
    • Lab Supplies Warehouse/Mailroom Supplies
    • MRO/Maintenance Waste Disposal
    • Natural Gas Welding Supplies
  • 4. Aberdeen Research
    • What Enterprises Want from Procurement Outsourcing
      • Access to improved pricing (66%)
      • Access to spending category expertise (50%)
      • Lower transactional processing costs and fewer burdens (50%)
      • Access to supplier intelligence (45%)
    • Source: The Procurement Outsourcing Benchmark Report, Aberdeen Group, May 2006
    • “ The decision to outsource is driven by whether a third party could
    • realize greater benefits in less time than your own company could.”
    • Source: “Out with the Old,” European Leaders in Procurement, 2005
  • 5. Aberdeen Research
    • Best-in-Class Performance:
      • 32% of companies outsource some procurement
      • 12.6% indirect spend savings due to outsourcing
      • 30% lower costs to process requisitions
      • Higher rate of compliance to contractual agreements
      • Currently outsourcing 59% to 75% of their spend
      • Source: 2007 Procurement Outsourcing Report, Aberdeen Group, 2007
  • 6. In-House or Outsource?
    • Why Outsource Cost Reduction??
      • You have limited internal resources
      • You want access to group buying power
      • You want access to subject matter experts in targeted areas
      • You want access to marketplace intelligence and benchmark pricing
      • You want a rapid ROI
  • 7. Alliance Cost Containment
    • ACC steps to savings through Strategic Sourcing
      • Preliminary cost savings analysis
      • Client engagement
      • Spend analysis
      • Supplier negotiations
      • Findings & recommendations report
      • Cost savings implementation
      • Vendor management & invoice auditing
  • 8. Sampling of Client Savings