In-Direct / Fixed Ops Cost Reduction

Happy Tuesday. 

 

I am working on updating a service for my organization, Performance Management Group, to better serve our current customers and future prospects.


We currently provide purchasing consulting on everything from office supplies to workers comp insurance to auto glass. 

 

In the past - this process has been solely about cost reduction - but I believe there can be further value in also offering contract management, invoice auditing, and vendor research.

 

Is there a market for this type of thing or should we continue to focus on the pure consulting?

 

Please let me know your thoughts!

 

Have a wonderful week!


Ryan

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Replies to This Discussion

Permalink Reply by Bert Martin on June 8, 2010 at 6:49pm
Ryan,
There is a definite need. I formed a company 10 years ago (since dissolved) where we found cost savings on all overhead items for several different types of companies. We would split the first year's saving 50/50.
In essence, you are doing the same thing with PMG, only you charge an upfront fee and/or recurring monthly charge for the same service, right?
Bert
Permalink Reply by Marty Mecca on June 8, 2010 at 10:40pm
Hi Ryan

I would look at warranty. Have the dealership send you 100% of their repair orders - there is probably alot of warranties that are getting overlooked or parts getting overlooked.

Martha Mecca, Inc.
928-830-6289
Permalink Reply by Ryan Kleinjan on June 9, 2010 at 9:24am
Bert -
Very similar - we have a two 'pronged' approach -- we do an analysis for clients over a years spend (usually a data extract we have done through the DMS) -- from there we analyze, benchmark against pre-negotiated pricing, and make recommendations as to how the dealer can reduce cost. In lieu of a contingency - we work on retainer that guarantees performance or the dealership will not be billed.

We also work as a procurement department - addressing expenses and purchasing needs the dealership needs so they do NOT have to invest internal resources into the due diligence to find the best supplier options or assure incumbents are providing market-place pricing.

How come you dissolved? Move on to other things? It has been tremendously interesting to see some of the ideas and efficiencies we come across working with our clients - lots of good ideas - sometimes not enough time to explore them, I guess.

Thanks for the feedback!

Ryan



Bert Martin said:
Ryan,
There is a definite need. I formed a company 10 years ago (since dissolved) where we found cost savings on all overhead items for several different types of companies. We would split the first year's saving 50/50.
In essence, you are doing the same thing with PMG, only you charge an upfront fee and/or recurring monthly charge for the same service, right?
Bert
Permalink Reply by Ryan Kleinjan on June 9, 2010 at 9:30am
Marty - Thanks for the note! This is interesting and has not been discussed before. Is this what you folks are doing at Martha Mecca?

I would love to learn more about the concept -- let me know if you have time to trade emails.

Thanks!

Ryan

Marty Mecca said:
Hi Ryan

I would look at warranty. Have the dealership send you 100% of their repair orders - there is probably alot of warranties that are getting overlooked or parts getting overlooked.

Martha Mecca, Inc.
928-830-6289
Permalink Reply by Marty Mecca on June 9, 2010 at 9:37am
Ryan Kleinjan said:
Marty - Thanks for the note! This is interesting and has not been discussed before. Is this what you folks are doing at Martha Mecca?

I would love to learn more about the concept -- let me know if you have time to trade emails.

Thanks!

Ryan

Marty Mecca said:
Hi Ryan

I would look at warranty. Have the dealership send you 100% of their repair orders - there is probably alot of warranties that are getting overlooked or parts getting overlooked.

Martha Mecca, Inc.
928-830-6289
Permalink Reply by Marty Mecca on June 9, 2010 at 9:37am
Marty Mecca said:
Ryan Kleinjan said:
Marty - Thanks for the note! This is interesting and has not been discussed before. Is this what you folks are doing at Martha Mecca?

I would love to learn more about the concept -- let me know if you have time to trade emails.

Thanks!

Ryan

Marty Mecca said:
Hi Ryan

I would look at warranty. Have the dealership send you 100% of their repair orders - there is probably alot of warranties that are getting overlooked or parts getting overlooked.

Martha Mecca, Inc.
928-830-6289
Permalink Reply by Marty Mecca on June 9, 2010 at 9:40am
This is part of what we do. Mainly we do warranty claims for automotive companies. We also look to see where money is not being claimed. I'm doing a company right now where I see exhaust manifolds aren't being charged out to the manufacture or oil is not charged out or freon, etc....

Ryan Kleinjan said:
Marty - Thanks for the note! This is interesting and has not been discussed before. Is this what you folks are doing at Martha Mecca?

I would love to learn more about the concept -- let me know if you have time to trade emails.

Thanks!

Ryan

Marty Mecca said:
Hi Ryan

I would look at warranty. Have the dealership send you 100% of their repair orders - there is probably alot of warranties that are getting overlooked or parts getting overlooked.

Martha Mecca, Inc.
928-830-6289

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