Vendor Cost Reduction



This training course has been specifically designed to develop a deep understanding of how to apply viable cost reductions in procurement. This training course will look at how you should take a pragmatic and holistic view to develop a sustainable and viable strategy that concentrates on supplier development, sourcing strategies, category management, win-win negotiation, collaboration and achieving the best price for the best value throughout the whole supply chain; without diminishing the level of service or quality.

By attending this training course, you will think long-term and learn how to work with all the supply chain to implement a program of cost containment initiatives that examines the efficiency of the supply chain, analyzing wasteful measures and looking at the whole life costing by using relevant spend analysis and Total Cost of Ownership techniques.

Target Participants:

  • Procurement professionals who need to understand the difference between cost cutting exercises and long-term cost reductions in the supply chain.
  • Procurement Officers.
  • Contracting Officers.
  • Supply Chain Professionals.
  • Program managers.
  • Those who are involved in the planning, evaluation, preparation and management of purchasing, tenders, contracts that cover the acquisition of materials, equipment, and services.


By the end of this course, participants will be able to:
  • Understand the actual requirements of why a service or product is being procured.
  • Understand the rationale required for a cost reduction strategy.
  • Understand the need for change to more strategic and innovative approaches.
  • Implement strategies to work with the supply chain to reduce costs in a pragmatic way.
  • Learn how to negotiate and develop a win-win situation.
  • Conduct spend analysis on all categories.
  • Implement long-term saving initiatives.

Course outlines:

  • Determining the Needs of the Organization to Develop a Sustainable Cost Reduction Program:
    As a procurement professional you need to understand the need to introduce and deliver a cost reduction program and understand the impact it will have on your organization and your suppliers.
    • Defining the Procurement Strategy.
    • Understand the real needs of the organization.
    • Analyzing and managing key stakeholders.
    • Determine the risks involved.
    • Conducting an internal spend analysis.
    • Identification of a long-term cost reduction strategy.
  • Supply Management Tools and Techniques to Determine Cost Reduction:
    Data and spend analysis are a fundamental method to establish methods to develop systems and processes to deliver value throughout the whole life cycle of a supply contract.
    • Procurement analysis tools and techniques.
    • Strategic cost management.
    • Principles of cost and value management.
    • Understanding the principles Total Cost of Ownership.
    • Benchmarking and developing ‘should cost.
    • Cost modelling / bottom-up costing.
  • Supplier Development and Collaboration:
    Understanding the supply market and knowing how to apply methods to deliver value for money throughout the life cycle of a supply contract is fundamental.
    • Creating a vision that is viable and sustainable.
    • Introducing clear and measurable cost reduction targets.
    • Developing inventive programs with key suppliers.
    • Negotiation strategies for a win-win relationship.
    • Renegotiating and changing existing supply contracts.
    • Monitoring performance and rewarding excellence.