Technology procurement for Department of Defense (DoD) applications presents some significant challenges for acquisition teams. Making the most of available resources is one particular challenge we’ve seen growing in scope recently. In our latest white paper, we explore some of the ways consolidating on an acquisition management strategy can reduce overall program cost and improve customer service.
Like most industries, the value of the relationships DoD prime contractors have with their vendors is often directly proportional to the amount of business they do together. Managing a smaller number of manufacturers and suppliers opens up more opportunities for the ones left in the process to become more familiar with your specific challenges, processes, and personnel so they are better equipped to service your projects. Better relationships can also mean paying lower prices, reducing overhead costs, and reducing the time it takes to complete a project.
In our experience, the overhead of having dedicated procurement staff and the processing costs can drive the average cost of a PO to as much as $900. Multiplied across a few dozen POs or more, and the cost gets out of control fast. The right procurement partner can carry some of the burdens that may come with managing and organizing the procurement logistics that come with billion-dollar DoD programs. A trusted customer/vendor partnership makes it possible for your staff to focus on where they add value. For example, allowing expensive engineering talent to focus on engineering versus chasing down shipments or kitting components as they arrive on unpredictable schedules or into different locations.
In test and measurement systems, the electrical components are going to be subjected to a rigorous vetting process. We’re concerned about every single component that goes into a test station. We evaluate potential vendors to make sure they have an established quality program, counterfeit protection programs, certificates of compliance, and their ability to offer traceability from their raw source supplier all the way to manufacturing.
Industry pressures and evolving requirements in the test and measurement industry are putting a focus on smart utilization of resources. Coordination of purchasing across a diverse supplier portfolio is extremely time-intensive and the soft costs that come with managing teams of people to handle procurement can add millions of dollars to programs. Besides being able to allocate human resources where they will be the most effective, other cost adders can be eliminated like shipping, tracking, storage, and logistics.
For more information on how vendor consolidation can help you fulfill your mission more efficiently, download the white paper here.