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Supplying discount rewards
00:00 22 Jul 1998
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Balfour is cutting the number of names on its procurement lists by
two-thirds. Its annual spend of £1.4 billion will be offered
to whoever can offer the biggest discounts in return for a doubling
or trebling of volume.
Although Balfour's procurement project has only recently got under way, 20 per cent of suppliers have already been eliminated. Paul Lester said: "They are electrical, mechanical and material suppliers. Some were upset.
"Balfour has grouped all its spend and we've started by looking at the highest spend areas, talking to the major suppliers. The question we are putting to them is that if we double or treble our business, what does that mean in terms of a discount?
"Once we've cut down the names on the list, the next step will be to eliminate waste. We are already introducing better monitoring of existing suppliers, recording numerous aspects of performance."
Although Balfour's procurement project has only recently got under way, 20 per cent of suppliers have already been eliminated. Paul Lester said: "They are electrical, mechanical and material suppliers. Some were upset.
"Balfour has grouped all its spend and we've started by looking at the highest spend areas, talking to the major suppliers. The question we are putting to them is that if we double or treble our business, what does that mean in terms of a discount?
"Once we've cut down the names on the list, the next step will be to eliminate waste. We are already introducing better monitoring of existing suppliers, recording numerous aspects of performance."
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