Three key ways to help cut excess spend
Updated July 27, 2022
By Kara Delewski | Customer Solutions Consultant
By Kara Delewski | Customer Solutions Consultant
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Year after year, everyone's top KPI is the same. Cut costs.
Sure, cutting costs seems like a no-brainer – the less you spend to produce, the more profitable your company is. But what costs can you afford to cut? What costs will have an impact? Where do you even start to look? If you’re looking to cut excess spend, but you don’t know where to start – this can help. 
Total cost of ownership
First, you must identify where in your indirect supply chain there is excess spend. A great way to do this is to conduct a Total Cost of Ownership Analysis (TCOA). A TCOA is a highly detailed analysis of your business with three main goals.
Vending technology Now that you’ve identified an opportunity to cut costs, it’s time to put a program in place that will show year-over-year savings. Think of it this way. Vending machines are truly just machines; the real savings is achieved via the software and data that vending is able to produce. With accurate and measurable data, you can create meaningful changes. Plus, using vending puts items right at the point of use where workers need them. This drives productivity, reduces inventory depletion, AND avoids excess purchasing. Each of those helps your bottom line. Choose a vending program that offers these.
A strategic partnership
A supplier tries to sell you on why their items and programs are good. A strategic partner tailors a customizable program that completely fits your needs, AFTER walking through your current process and understanding what those needs are. This partnership should revolve around collaborative discussion on opportunities, each identified through the TCOA. Common areas are contract pricing, freight costs, solutions, point-of-use items, and standardization. A strategic partner will help by providing best-in-class service and solutions for your supply chain. Your goals are their goals, and they want to make those a priority for the service they provide. When choosing a strategic partner look for:
The takeaway It all boils down to this: Cutting costs is easier with a strategic partner. Ideally, you'll find one that can use technology to reduce your TCO. Let’s talk! If you’d like to reach out, please contact me on LinkedIn! I’m a Customer Solutions Consultant with Fastenal, and I’ve been with the company for eight years. You may also like:
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