Tag: procurement

Avoidance strategies for 7 common pitfalls in Strategic Procurement implementation

Procurement Pitfalls

Avoiding 7 Strategic Procurement Pitfalls

Strategic Procurement offers major supply chain savings, but only when done right. We’ve compiled the 7 most common pitfalls we see in Strategic Procurement deployments, along with the strategies we employ to help our client partners avoid them….

Your supplier just raised their prices. What now? How do you know if the increase is fair and reasonable?

Price Hikes

Mitigating Supplier Price Increases

Ready to move from tactical firefighting to strategic advantage? Price hikes are hitting businesses everywhere, but how we respond makes all the difference. We help our client partners develop and install Strategic Sourcing programs that leverage total spend, reduce costs, and protect supply for the long term….

What type of organization requires a highly flexible replenishment model? - Intermittent or "long tail" demand across a wide SKU base - Sporadic, unstable, or highly variable order patterns - Non-repeating or project based demand cycles - Extensive assortments of slow-moving or specialized SKUs Opportunity Indicators: low inventory turns, poor OTIF, stockouts, delays, and lost sales

Flexible Replenishment Models

For Unpredictable Demand Across Wide SKU Base

Flexible replenishment models—leveraging historical data, real-time analytics, and demand variability—enable companies to maintain service levels without tying up working capital in excess inventory. We help our client partners build tailored, data-driven replenishment processes that boost both efficiency and customer satisfaction….

Enhanced demand management, supply chain, and collaboration

Category Management

Reducing Annualized Material Costs

Kormac recently partnered with a global distributor of engineered components to address inefficiencies across its supply chain. We jointly achieved 20% reduction in annualized material costs, 18% reduction in working capital inventory, and 50% improvement in customer fill rate….

Control Amidst Chaos In turbulent times, focus on what you can control: your labor efficiency, your facility footprint, your operational excellence, and your supply chain

Tariff Compensation

Focus On What You Can Control

Market disruption and policy changes can feel paralyzing, but we urge our client partners to focus on what is within their control to maximize operational plan attainment, resilience, and sustainability. Kormac helps clients swiftly adapt to changing conditions. We’re pleased to share this quick guide to cost management and tariff compensation strategies….

Strategic Sourcing Category Management Savings Kormac is helping an industrial components provider to reduce costs by developing and institutionalizing a rigorous Strategic Sourcing process. Initial results in Metal Fabrication: 13% to 16% cost reduction across 59 parts We're currently addressing major spend categories addressing 40% of our client's annual COGS. In 2025, we'll tackle the "spend tail" to uncover additional savings on lower-use items.

Strategic Sourcing

Category Management

We recently partnered with a leading industrial components provider to reduce costs by developing and institutionalizing a rigorous Strategic Sourcing process. In the first spend category, we immediately revealed a 13% to 16% cost reduction opportunity. We’ll soon address major spend categories representing 40% of our client’s annual COGS….

Global Supply Chain Global Supply Base Diversification As in all forms of investment, diversification reduces risk. Tariff talk and geopolitical uncertainty are prompting plans for greater supply and footprint diversification. We enjoy helping our client partners build secure, flexible, and adaptable supply chains suited for our increasingly complex global business environment.

Supplier Diversification

Global Supply Chain

From China+1 to “friendshoring,” supplier diversification is hot. Tariff talk and geopolitical tensions are prompting plans for greater geographic supply diversification. We enjoy helping our client partners build secure, flexible, and adaptable supply chains suited for our increasingly complex global business environment….

"Working with suppliers is just as important as listening to customers." - Barry Nalebuff, Yale School of Management

Supplier Development

Supplier Development Program (SDP)

Many of our client partners are turning to their supply base for collaborative performance improvements. Formalizing a Supplier Development Program can transform transactional relationships into strategic partnerships delivering outsized mutual benefit….

Cost Management Rebalancing the margin tug-of-war Does your organization struggle to achieve financial goals in an increasingly volatile marketplace? [iconography of two teams playing tug of war, with the target margin in the middle. Text above the image reads "Kormac Rebalancing"] Cost Pressures: Labor, Materials, Logistics, Real estate, Technolgy Market Pressures: Pricing, service delivery, quality, lead time, social responsibility Kormac's Surgival Strike Methodology™ delivers the agility you need to meet your financial objectivers.

Cost Management

Rebalancing the margin tug-of-war

As the labor and supply cost rollercoaster continues, we are working with several clients to identify new management levers. Among them: Increasing the frequency of cost reviews to ensure faster customer price adjustments and/or tying customer pricing to component market indices Executing Value Analysis and Value Engineering efforts to drive...