How to save on company purchases?

Bad purchasing organization often results in multimillion losses for both private companies and government offices. In the process of saving money a well-prepared purchasing strategy may be really helpful.

The greater expenses in a company help to reduce an unit price of certain products. It is worth considering to create one purchase department within a company for all units. The specialized department will bear in mind the interest of the whole company and not only the part of it.


When IT department buys computers, administrative – building materials and investment department – investment projects, in our opinion – and some examples of several hundred enterprises all over the world confirm it – it is wrong – convinces Mariusz Turek, partner in PROFITIA Management Consultants, a consulting company specialized in purchase advice. – If each internal client buys only for himself, he pays attention to the price in order to stick to his budget. However, if it is a separated unit, the aim of which is to reduce all costs, that is not only to provide quality but first and foremost maximally reduce costs – it is good for the agency.  


The transfer of a budget to a specialized purchase department constitutes the first stage of saving in a company. The another one consisting in development of a purchase strategy aiming at standards which determine what, where and on which conditions should be bought in order it would be the most profitable to a company – this strategy should be applied equally in all organization’s departments. We look at deliverers and legalities and then we wonder if the mutual contract in agriculture in one purchase model is more profitable than in the other one – points out Mariusz Turek. – If a company should go in the direction of framework agreements or single purchases. It all depends on the category’s character and market of suppliers.


The development of an optimal purchase strategy in a company, the choice of a proper deliverer and purchase leverage, that is a presentation of buyer’s assets to a salesman will allow to obtain more attractive purchase conditions. Merchants should participate in negotiation, market analysis, risk management and finance workshops – advises partner in PROFITIA Management Consultants. – There are various purchase workshops as well as programs of competence building. It is not enough to have a team of 30, 50 or 100 merchants. It will not provide the correctness of purchase processes. Therefore, they should be well-trained and know exactly what they are doing.  


The right purchase strategy will allow to save money, reduce time consumed by purchase processes and increase transparency, that is a cost clarity of the whole purchase process.


For instance, we realized a project concerning the purchase of office materials for the very important client from public administration – mentions Mariusz Turek from PROFITIA Management Consultants. – Initially, it seemed to be a very simple task. However, it turned out that all units within this organization spend annually even 50 million zlotys on those materials, that is a huge sum of money. We limited them the basket of office materials which they were able to buy, from 2 000 positions to 300 and we consolidated purchases in this category within one central tender. It translated into not 20 or 25 per cent but 60 per cent savings per year.

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