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Efficient cost savings in the procurement procedures of industrial enterprises

Pleschenko V.

Research in Logistics & Production

2012

Vol. 2, No. 1

17-30

Cost saving is one of the most important factors for sustainability of the industrial enterprise. The company must optimize its procurement process, monitor and forecast of market prices, search and introduce alternative, select future partners carefully and apply optimal procedures. Also the buyer has to distribute the orders among suppliers, motivate them in cooperation and promote competition between suppliers. It is important to evaluate the transaction costs for buyer and participants before announcement of the tender, compare them with the parameters of the transaction and the market situation. The article shows growing costs in case of superposition of procurement cycles, and notes that the switch is characterized not only by cost but also time figures. It is concluded that the minimization of switching time leads to cost saving.