Unit 7 P4 Business
Suppliers and the ordering process
The ordering process can sometimes be a source of unnecessary costs. This might happen as OBS deals with too many suppliers and there is no clear ordering policy or guidelines as ordering is not centralised. Thus there are insufficient internal controls against mistakes and/or fraud. Reducing the number of suppliers that OBS deal with can often result in savings, especially if it gives you the opportunity to improve relationships with the remaining suppliers and negotiate lower prices and better payment terms.
Reducing labour costs
For OBS, labour is one the biggest cost centre. Thus it is important to avoid cuts that might leave the company without key human resources or at a competitive disadvantage. However
The ordering process can sometimes be a source of unnecessary costs. This might happen as OBS deals with too many suppliers and there is no clear ordering policy or guidelines as ordering is not centralised. Thus there are insufficient internal controls against mistakes and/or fraud. Reducing the number of suppliers that OBS deal with can often result in savings, especially if it gives you the opportunity to improve relationships with the remaining suppliers and negotiate lower prices and better payment terms.
Reducing labour costs
For OBS, labour is one the biggest cost centre. Thus it is important to avoid cuts that might leave the company without key human resources or at a competitive disadvantage. However