The Construction sector is considered to be a basic industry on which the development of the country depends to a great extent, the growth of the construction companies is determined by the quality of the companies and their capability. Therefore, purchasing is the act of buying the goods and services that a company need to operate. Purchasing is now seen as more of strategic function that can be used to control and reduce bottom line costs. Cost reduction refers to the real and permanent reduction in the unit cost of the goods manufactured or services rendered.
Below are the eight strategies can be use in purchasing departments wherein companies have achieved stunning bottom-line gains through revamped purchasing process.
Strategy 1: Value Analysis for Cost Reduction
Value analysis as a powerful cost reduction strategies which is systematically identifies the hidden, unnecessary costs in a materials or services or a process and eliminates them to provide the necessary function at a minimum cost.