Evaluation of tenders in manufacturing procurement
A leading manufacturing company used WTP to evaluate a €1 million office furniture tender through detailed cost modelling, industry benchmarks, and historical raw material data. This fact-based approach provided greater insight into direct and indirect cost drivers, enabling stronger supplier negotiations and better purchasing decisions. As a result, the company achieved €100,000 in savings, representing a 10% reduction in procurement costs.
Introduction
A leading manufacturing company, recognized for its expertise in production, initiated a procurement plan in 2022 to purchase office furniture for its administrative and engineering departments, with an estimated budget of 1 million euros. To make the purchase as cost-efficient as possible, the company opted for the "What's the Price" (WTP) software, which they already use for their manufacturing department.
Approach with WTP
The company used Industry Cost Profiles based on NAICS codes to conduct a custom cost analysis for their target sector. This helped in making better procurement choices. The software highlighted both direct and indirect costs, giving a complete cost overview and detailed insights into 18 cost factors like energy, capex, PBT, etc.
Furthermore, using the unique extensive historical raw material prices available in the WTP application, the company gained immediate insights into the evolution of raw materials and their impact on overall costs.
Such a detailed overview paved the way for effective negotiations with furniture suppliers, as the company could anticipate price fluctuations based on historical trends. But
also, was able to accurately assess the financial impact of sustainable raw materials.
Concrete Results
Using "What's the Price", the manufacturing company saved 100,000 euros on a 1 million euro budget, a 10% reduction. By analyzing past prices, direct and indirect costs, and specific sector costs, the company improved its buying decisions. The WTP software proved its worth and benefit to the company's purchases.
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