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Step 2: Build a successful money-saving strategy

A key step to building a cost-effective purchasing strategy is to use fewer suppliers, writes Nick Coleman.

The first step in putting together a money-saving plan is to collect and analyse data from the practice's records on how it currently spends its cash.

The next step is using this data profitably.

For example, assume you have analysed your costs and found out that the practice is spending £30,000 a year on consumables, including things like toilet rolls, stationery, printer cartridges and Vacutainers.

As well as saving money on these items, do you also want to save administration time on ordering, checking deliveries and invoices?

Rationalising purchasing by ordering more from fewer sources will make suppliers keener to keep your custom by offering keener pricing.

Increase your spend and gain better leverage over suppliers by:

  • Increasing the number of categories (product types) you buy from specific suppliers.
  • Committing to a spend threshold for the year. Check first that the amount you agree to spend is realistic: you do not want more delivered than you need.
  • Getting local practices to use the same suppliers (via a buying club, say) to qualify for bulk order discounts. But be warned: the club must be efficiently run to avoid delays.

The practice can always threaten to vote with its feet if suppliers will not give you the price deal you want. However, never threaten this unless you can see it through or you may only succeed in undermining your negotiating position.

Buy wisely plan

STEP 1 Gather information.

STEP 2 Build a successful money-saving strategy.

STEP 3 Know the market and how to find the right suppliers.

STEP 4 Evaluate suppliers to ensure they can meet your expectations.

STEP 5 Negotiate on price.

STEP 6 Put your money-saving strategy to work.

STEP 7 Review the savings made and find out what you can do better in the future.

  • Nick Coleman is director of healthcare sector procurement specialists ProCure Health Ltd

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