How Can we Maximise the Benefits of Vendor Reduction for Machine Building OEMs?

The implementation of a vendor reduction program is widely recognised as having significant benefits for UK machine builders in terms of reducing numbers of orders and invoices. However, the actual cost saving is difficult to measure as in our experience an OEM is usually buying products for a complete machine BOM. This can easily exceed 200+ electrical items bought previously from perhaps 10 suppliers.

It is possible to buy all of these items from a single supplier, thereby reducing orders by 9. In practice, however, the 200+ line items still need to transacted and a processing time is associated with every line, even via a single supplier.

Routeco have taken the vendor reduction process one step further by having the capability of electronically uploading and turning complete BOMs into one kit part number, (or a few kit part numbers) dramatically reducing information input and giving the true benefits of vendor reduction:-

One order line, one delivery and one invoice!

Brian Benson
Group Packaged Solutions Manager