Collaborating With Suppliers For Cost Efficiency

Are your procurement practices stuck in a "ONE-SIZE-FITS-ALL" mindset? We’ve all seen it: A company with strong sustainability goals tries to enforce the same standards across every supplier, expecting one policy to work in vastly different environments. But when it comes to sustainable procurement, what if the key isn’t in replication but flexibility? Take Toyota Motor Corporation, for instance. Their long-standing relationships with suppliers show that collaboration and visibility drive better results than rigid rules ever could. In fact, they describe their interactions as “almost intrusive” but in the best way. This approach ensures both sides remain committed to shared goals, like reducing waste or enhancing resource efficiency, while allowing each partner to bring unique solutions to the table. Imagine this: Rather than prescribing exactly how each supplier should reduce packaging waste, set a shared target say, a 15% reduction. One supplier might use smaller boxes, another might swap materials entirely. Both achieve the goal, but each does it in a way that suits their specific setup. But here’s the trick: For this mindset shift to work, transparency is essential. It’s about creating a culture of openness, where every team and supplier feels empowered to innovate toward that common objective. Consider taking inspiration from the UN Sustainable Development Goals. Which aligns with your company’s values? Could you integrate these into your procurement practices to guide not just one supplier, but your entire supply chain toward a long-term vision? Switching from a prescriptive policy to a shared goal mindset doesn’t just drive sustainability it fosters trust, creativity, and results that everyone can own. So, Is it time to rethink how you define “BEST PRACTICES”?

Here’s how I used strategy and tech for $8 million savings—and why this matters for business. We had an ambitious goal: reduce costs on contractor billing rates for an insurance company without sacrificing quality. Here’s how we did *exact* that: ✅ Gathered all *12 suppliers* for one last round. ✅ Introduced them all—head-to-head—in an electronic reverse auction. ✅ Gave full transparency: every bid was visible and compared live. (It was almost like watching an intense bidding war play out!) Within *three hours*, prices dropped by *10%*. That’s $8 million slashed from our cost base. But this wasn’t just about cutting costs. → Quality remained untouched. → Transparency built stronger relationships with suppliers. → Real savings boosted bottom-line resilience. Here’s why this matters: Businesses often waste millions by underutilizing tech tools that create competition and efficiency. Reverse auctions make *real-time visibility* happen—and visibility is power. I’ve seen firsthand how much impact *smart procurement* with tech can have. Other teams can replicate this across different cost categories, with big results. Want my take? Use tech strategies that optimize costs without compromise. Build trust by creating transparency. And embrace competition—it drives innovation. How do you approach optimizing costs without cutting corners? Would this strategy work for your business? Let’s share ideas.

Procurement isn’t just about buying things. It's a vital supply chain function that impacts your bottom line. Many professionals overlook it. They don’t see the connection between procurement and overall efficiency. I learned this early in my career. I managed a $400 million plastics packaging spend. I had no clue about bottles or caps. But I made it my mission to understand every cost driver. My real education came from suppliers. I toured their factories. I spoke with operators. I discovered how our company created waste. Bad forecasts and frequent scheduling changes disrupted the supply chain. We turned things around by streamlining communication. Suppliers joined us in production strategy discussions. The results were significant: - Reduced waste - Lower costs - Improved customer service - Major reductions in inventory This experience taught me an essential lesson: To create value in procurement, you must see the bigger picture. Ask yourself: how can you include suppliers in your processes? Start by inviting them into planning meetings. You will enhance efficiency and save money in the long run. Your procurement strategy deserves that focus.