Operations consultancy / Procurement and supplier review

Procurement and supplier review

You have not tested the market on a major spend line in years, or your third party logistics contract has rolled over without anyone checking it against the market.

What does the work involve?

  • Spend and service analysed together, because the cheapest supplier is rarely the cheapest outcome.
  • Requirements written from the operation rather than from the last contract.
  • Market comparison, with tender or negotiation support.
  • For a third party logistics or warehousing provider, a shortlist built from who can actually serve the volumes and the lanes you run, then a tender they all quote against on the same terms.

What do you get?

  • A spend and service baseline.
  • A requirement specification suppliers can quote against.
  • Comparison, negotiation support and a governance structure that keeps the saving after year one.

Who does it suit?

Any recurring spend line over roughly $100,000 a year that has rolled over without being tested. Third party logistics, warehousing, freight, pallets and consumables are the usual ones.

Who is it not for?

A spend line under about $100,000 a year, where the saving would not cover the work, or a buying agent to run the tender for you.

How long does it take?

Three to six weeks, set by the number of spend lines and whether the market is tested inside the review.

What do we need from you?

Missing some of this is normal and is not a reason to wait. Send what exists and we will tell you what the work can and cannot conclude before anyone commits.

  • Twelve months of spend on the line being reviewed.
  • The current contract and any rate schedule.
  • Service performance data, so price is not compared in isolation.

What does it cost?

Scoped project, priced as work rather than as a share of the saving.

How does 360 work?

A consultant delivers the work and is accountable for the content. Findings come from the data you supply and what we observe inside the agreed scope, and estimated benefits are opportunities to test rather than guaranteed savings. Where a recommendation could lead to 360 earning from supply, we say so in the report so you can compare it against the market. Full terms are on the purchase terms page.

Not sure this is the right one? The operations health check takes ten minutes, costs nothing and tells you where to look first.

The six areas

Which six areas does a procurement review cover?

AreaWhat is checkedWhere the money usually is
FreightRate cards against actual consignments, fuel levy mechanism, accessorials, DIFOT by laneLanes priced years ago for a volume that has changed; accessorials nobody reconciles
PalletsPooled hire against owning, transfers and lost equipment charges, empties recovered or skippedHire on pallets that sit; pallets thrown in skips that a recycler would pay for
WasteBin sizes against fill, lift frequency, contamination charges, the contract's renewal clauseHalf-empty bins lifted on a schedule; contracts that rolled over unread
ConsumablesStretch wrap, strapping, labels, cartons, tape, PPE: specification, usage and price per unit actually usedOver-specified wrap, four suppliers for one item, nobody owning the usage
Warehouse services3PL contracts, racking and forklift hire, maintenance, cleaningStorage charged on a basis that suits the provider; minimums outgrown
Energy and sitePower on the site profile, lighting, charging, compressed air, site servicesTariffs never retested; equipment running on days the site is closed

Each area comes back the same way: the current cost traced from invoices, the specification the operation actually needs, the market price for that specification, and the saving with the action and the owner. Nothing is recommended that the operation has not been checked against on the floor; a cheaper stretch wrap that fails on the pallet is not a saving.

Questions

Do you take a percentage of the saving?

No. The work is priced as work, so the recommendation is not bent by what it pays us.

Can you run the tender for us?

The review writes the brief, builds the comparison and reads the responses line by line against your current rates and service. Running the tender process itself, and the negotiation, stays with you, with the figures in front of you.

Which spend lines usually pay back?

Third party logistics and warehousing, freight, pallets, packaging and consumables, in roughly that order, because they are the lines that roll over on a rate card nobody has tested. A contract that has renewed twice without a market test is the usual trigger.

Will our current supplier find out?

Only when you tell them. The review works from your invoices, the contract and the service data. Testing the market is often done quietly first so you know the gap before the conversation.

Do you travel outside Sydney?

Site days run in person. Travel is included for Greater Sydney, the Illawarra, the Central Coast and Newcastle; anywhere else in Australia or New Zealand the travel is quoted at cost before you commit, and the desk work is done remotely either way.

Related work

All sixteen consultancy services.

On site across Australia, with the deepest coverage in Sydney and Melbourne. Travel outside those areas is quoted as its own line rather than folded into the fee.

Benchmarking yourself? We published what a good DIFOT actually is. Want the price before you ask? See what a review costs. Not sure where to start? Take the ten minute health check.

Call 0494 820 639 Free health check