b) Formalizing a supplier cost optimization effort to rationalize the supplier landscape Supplier cost optimization focuses on examining the entire supplier landscape and investigating opportunities for run-rate savings and cost avoidance. This effort is an enhanced form of category management, which identifies redundancies from a technical and supplier perspective.
In VMO, it’s about increasing rigor:
/ Re-focus on invoice management to ensure you’re not being over- billed. Provide checklists for invoice reviewers that require them to review and report what they find. / Conduct strategic alignment sessions now rather than waiting for the next cycle to find out where service providers can help with your new or adjusted strategies and priorities. / Pursue performance credits that you may have turned a blind eye to. / Review contracts with leaders in the in-scope service areas. There are always obligations that providers are responsible for that no one has tracked. Again, make sure you’re getting what you’re paying for. / Hold providers accountable for any automation that they have agreed they are obligated to perform.
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