Cutting Out the Middleman in Global Sourcing
Disintermediation or ‘cutting out the middleman‘ is an important issue in modern supply chain management and could even be the key to the future success of your business. Intermediaries may make life easier, but they also limit your ability to secure the best deal with the best suppliers at the best price. However, while moving away from agents and brokers can lead to lower costs, it can also add to the complexity of your procurement function.
Companies need to consider disintermediation as part of the larger supply chain design question. In their quest to compete in the global market and meet the needs of demanding customers, many companies have restructured, reorganized, and re-engineered their supply chain. These companies now go directly to suppliers to negotiate the best possible deal without compromising on quality.
Our recent work with a global food producer and distributor is a good illustration of how disintermediation and low-cost country sourcing can be an important part of designing a world-class supply chain. Our client was buying 80-90% of its products through import brokers and was under pressure from its competitors. Senior executives recognized that a key to long-term success is to have direct access to suppliers in low-cost countries to improve overall quality and quality cost.
Find out how we helped our client develop a global sourcing plan that switched 50% of required volumes into direct sourcing from low-cost countries, achieved savings on direct raw material spend and transformed the way they understand global movements in their value chain.
As specialists in procurement, logistics and operations, we know that there are cost savings to be found almost everywhere in the key areas of your value chain. Not only that, we have the experience, methodology and capability to deliver significant savings and help clients move up the maturity curve to achieve Total Value Optimization™.
Find out how Maine Pointe can help assess your operations and implement improvement projects that deliver fast and compelling economic returns.