SMEs make significant savings by collaborating on indirect purchasing

By Elaine Watson

- Last updated on GMT

Related tags Mobile phone

SMEs make significant savings by collaborating on indirect purchasing
Small and medium-sized food manufacturers have made significant savings on indirect expenditure areas such as telecoms and stationery by collaborating to secure preferential buying terms.

Combined Buying Services (CBS) md Steve Haslett told that food manufacturers in the buying group had secured more favourable terms on everything from utilities to mobile phones, fuel, IT services, access systems and travel.

While CBS did negotiate terms for members on ingredients and packaging, the biggest benefits were often derived in indirect or non-core areas where manufacturers lacked experience and expertise, for example in courier services, telecoms, fuel or office equipment, he said.

“Our motto is that we can help the most for things that are a ‘chore not core’ - we have combined buying power in key areas of expenditure that deliver terms unattainable by individual companies. In some cases, however, the value is not necessarily from large cash savings, but in freeing up time so that your people can make savings elsewhere.

“For instance, CBS removes the burden of needing to understand the complexities of terms offered by suppliers of mobile telephones. In fact, CBS is now one of BT's top 100 customers.

Boosting buying clout

CBS now has about 40-50 food manufacturers on board. However, it is also open to retailers, wholesalers and other parties, said Haslett, who has recently invited non-competing consortia from across the food industry to pool their spends to improve their buying clout. "We have members with turnovers ranging from £1m to £300m."

He added: “We are already in discussions with several other interested groups after successful trials with a catering group and a confectionery wholesaler.

“This initiative will only extend to general indirects so as not to deflect from the main activities of the participating groups. This is a significant step forward in collaborative purchasing and the feedback we are getting is very encouraging."

West-Sussex-based CBS was established in the early 1990s as the Independent Manufacturers’ Alliance, but now trades as Combined Buying Services.

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