Prime Advantage Blog

How to Lower Your Spending on Metals

Louise O'Sullivan on Jul 2, 2015 6:00:00 AM

In manufacturing, spending less is every procurement team's challenge. Lowering costs mandates both expertise and experience for best results. Reducing spend on a specific commodity, like metals, is even tougher, requiring the buyer to be a little clairvoyant and a lot like Houdini. 

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Lowering metals spending is both an art and a science. Clairvoyance is almost a required skill -- the ability to prophesy your own company's metals needs and where the actual metals market is moving -- is an art. The science is in knowing what materials can be substituted without compromising the integrity of the product.

The secret to mastering both the art and the science of lowering spending on metals is education. Where does one get that knowledge while still performing daily duties? One place to find it is your current metals distributors; the majority of which are extremely knowledgeable and willing to pass on their experience and expertise to help you maximize your role.

But what if your current metals distributor doesn’t carry the substitutable metals that can lower your costs? Will he or she reveal those lower grade materials, or newer but less expensive finishes, if they are not in his basket of offerings?

One could go online and read up on the latest products from mills and service centers. Or, even better, one could rely on a shared network of qualified resources -- actual practitioners -- that do what you do and are willing to share best practices without compromising intellectual or proprietary information.

Where does one find that shared network of experts? A great place to begin is within a buying group that holds conferences and provides expert speakers and benchmarking sessions for the purpose of shared knowledge opportunities.

Procurement professionals find a solid network of people in similar positions with similar challenges at these conferences. Their bank of knowledge is as vast and varied as their products are different, but their methodologies and problem-solving skills are tried and true. Lifelong relationships and trusted advisor partnerships are developed and cultivated.

On the leading, but not bleeding, edge of technology is where most finished goods manufacturers want to be. One could find this in a buying group that has a relentless focus on reducing the total cost of ownership of metals purchases and specializes in both raw materials and components. Everyone who comes to these meetings has the same purpose and mission for his or her own company. Within this priceless network lies the magic—the knowledge and expertise to make those costs disappear, just like Houdini!

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Topics: Manufacturing

Louise O'Sullivan

Posted by Louise O'Sullivan

Louise O'Sullivan founded Prime Advantage, a Chicago-based Group Purchasing Organization for mid-market manufacturers, in 1997, following a successful 22-year manufacturing executive career with the Dover Corporation. Louise has won top manufacturing and supply chain awards, and is a featured speaker at many events.

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