Most suppliers will claim they’re barely turning a profit on your account. But how can you be sure? The statement isn’t dollar-specific, but it implies you’re getting the supplier’s best number. It’s vague enough to be more of a fib than a lie!
It’s not all about their numbers, though. Your numbers matter, too.
How are you benefiting from the vendor relationship? How does your vendor stack up against others?
Benchmarking with CenterPoint Group is the edge you need to ensure that your supplier is on the level with you. Let’s discuss it and answer the question, “Is your supplier giving you a good deal?” by finding out more about the key metrics benchmarking can provide.
Procurement benchmarking depends on 5 foundational references:
- What percentage of total spend is operating expenses?
- What percentage of total spend are savings?
- How much does it cost to process a Purchase Order?
- Which suppliers are receiving the lion’s share of your budget?
- How much of your total spend does procurement control or manage?
There are many other factors involved in determining whether your supplier is doing you any favors, but this is a good start and a firm foundation for benchmarking.
For the purposes of this post, we’ll focus on reference 4, which is the metric most relevant in terms of your supplier relationships, their transparency and the mutual benefit they’re capable of producing.
The top 6%
Almost globally, companies do the bulk of their business in the supply chain with 6% of their active vendors. These are the outfits who receive 80% of the company budget in their class of supply or service.
You’re given a sterling opportunity to cement mutually beneficial relationships with this top tier of suppliers. Cemented by loyalty and shared interest, the top 6% is your ticket to a solid and sustainable supply chain that serves vendors, buyers and everyone else involved.
Relationships are what the world is built on. Good relationships are well worth cultivating, when it comes to your top 6%, because they serve the greater good and certainly, your bottom line.
Because when your supplier relationships are strong, you’re never going to have to wonder if your supplier is bending the truth. Good relationships are supported by honesty and transparency, which add up to total integrity.
At CenterPoint, we’re a data-driven procurement advisor. With the power of numbers, we bring you superior customer support which does the benchmarking for you. You’ll always know where you stand in your vendor relationships with CenterPoint, because precision benchmarking answers the question for you.
With sophisticated auditing, benchmarking and analysis, CenterPoint is technologically able to provide you with the detailed vendor monitoring you need to know you’re getting the best deal possible.
Getting a handle on your vendor relationships is the first step toward getting the best possible deal. With CenterPoint, that’s already done. We get to the heart of the matter by deploying laser sharp data analysis that gets you there. Contact us.