10 Cost Cutting Tips for the Next Recession

Almost twelve years ago, our Source-to-Pay experts were staring down a steep economic downturn. They recognized that a bear market isn't just a challenge for American businesses. For the well-equipped, forward-looking Procurement team, it's also an opportunity to evolve and embrace a leadership role.

ISM's Manufacturing Index just hit its lowest point since those dark days and economists and homeowners alike expect we'll see another recession in the near-term future. That means time is running out for Procurement teams to begin safeguarding their organization and devising survival strategies.

Before things take another turn, let's look back at the advice we offered Procurement professionals in 2008. These same best practices should benefit any organization looking to recession-proof its bottom line and enter tough economic times with more confidence.

Recession-Proofing Procurement 

1. Creativity should define every aspect of your approach: From supplier identification and qualification to the contracting and negotiations stage, look for opportunities to innovate and take the business in new directions.

2. Collecting data saves dollars: To maximize savings, ensure your team has access to a wealth of accurate, actionable data. More crucially, make sure your team knows how to turn data's raw information into wisdom.

3. Examining or (re-examining) your sourcing strategy will pay off: Markets change quickly and that's doubly true during tough times. Those organizations that survive and thrive are those that stay on their toes and constantly reassess their legacy processes.

4. Developing a supplier list always adds value: Are you counting on a small pool of suppliers? Good luck. There's no telling who'll survive a recession and you can't afford to limit yourself. Casting a wide net will keep from you relying too heavily on individual suppliers and 

5. Communicate, communicate, communicate: Open communication is everything throughout the RFP process. Keeping your prospective vendors informed and engaged will make them all the more likely to offer savings and innovative solutions. And don't forget - an RFP isn't always your best option.

6. Analyzing responses are often the missing link: Develop a fact-based, objective market picture and plan from there.

7. Only fools rush in: Taking time saves money. Always make the effort to gauge every supplier response and proposal against your own internal benchmarks. Get it right the first time!

8. Measure twice, cut once: Planning and implementing effectively makes all the difference in making expectations into reality.

9. Don't check out: Continuous performance management will keep your suppliers (and your own team) on their toes and promote sustainable value generation.

10. Watch your back while moving forward: Always make sure to keep a careful eye what your competitors are doing both in terms of processes and strategies.

Want to learn more about Procurement's recession-proofing powers? There's still time to register for our upcoming webinar with ISM-New Jersey. Sign up today for the insights you'll need to thrive in Supply Management's next era - whatever comes next.