ABSTRACT
Centralizing purchases across business units can achieve cost savings through volume-based discounts, gain a better understanding of user requirements across the company, and address them more effectively. While the primary focus of Lean isn't really cost, many of the end results, such as increased throughput, better quality, fewer errors, etc., can certainly result in lower costs to the manufacturer, distributor, and retailer, to mention the ultimate consumer. The general sources of price information discussed in some of the strategies just mentioned are price lists, quotations, other buyers in the market, trade journals, negotiations, competitive bidding. The most popular pricing methods used are standard price lists, competitive bidding, and negotiations. During the negotiations, the team felt it could be more flexible and creative because it had a clear understanding of the other side's needs, and therefore the negotiating sessions went smoothly, with both sides satisfied and fully committed.
