Cost Reduction Example
In today's economic climate, generating
extra turnover and consequently increased profit,
is becoming increasingly difficult.
Therefore most forward thinking companies are turning their
attention to having a better control of their cost
base.
The simple example below demonstrates how by reducing
your cost base you can have a significant impact on the
profitability of your company;
Imagine your company is turning over £20million
p/a with an indirect expenditure of £5million and making a
10% gross profit (£2million). To
achieve a 50% profit improvement by increasing sales, you would
have to increase your turnover by 50%
(or £10million) no mean achievement!!!. However through better
procurement you could deliver the
same profit uplift by reducing your overall indirect
purchases by a very realistic 20%,
This is where Premier Procurement Solutions
can work with you to achieve your business growth. Our case
studies demonstrate practical
examples of this principles used in practice .