.


  • REMOVING  INTERMEDIARIES-Wherever  possible  buy directly from  manufacturers
    /authorised dealers /OEM not from any agent /dealer or commission agent . Lesser the
    intermediaries  lower the rate .




  • NON - BRANDED  ITEMS-Look out for  non branded items  for non - critical areas  as
    branded  items has premium attached to it .Some times you can get good items  which are
    non - branded just in case of garments.




  • RECYCLING  AND REUSE-All items come into some form of  secondary packaging  and out
    of which some of the items can be reused  or recycled .Ask vendors to  reuse /recycle  
    packing items . eg  cans , sacks , bottles , cores  trays  and pallets etc .



  • CONVERSION S-Buying  primary  material  then giving  it to  processor  instead  of buying  
    directly  from the  converter , it helps in two ways as we can avail modvat  exemption on the
    raw material and can eliminate the  premium on conversion  egKraft paper for cbbs .




  • MAKE  AND BUY DECISIONS-Few  items can be  made in house rather getting it from
    outside eg grounded sugar , cashew nuts etc .




  • NEGOTIATIONS-The  price should always  be negotiated  with all information available .
    Prices  are when you are informed  and  aware of options available .Always check  prices  
    with alternate sources .




  • ECONOMICAL  ORDER QUANTITY ( EOQ )-This is the maximum qty  of item which you can
    place to an vendor taking into account the frequency of items used .
It helps in reducing  inventory cost .



  • INSPECTION-By eliminating inspection at factory and asking vendors to provide materials
    as per standards and completing inspections at their end we can eliminate delays and
    manpower  used in these kind of activities .




  • SCRAP  MANAGEMENT-Segregation  of scrap generated  in a manufacturing  unit is
    important .It has been observed  that all scrap  are sold as lot  to scrap merchant  who in
    turn segregates  it in different  categories and sells it in  at higher rates .




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COST REDUCTION IDEAS  - PROCUREMENT
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