Keep it in YOUR wallet
If you found money laying on the sidewalk, would you pick it up? Of course you would!
Everyone knows if your car has better gas mileage, you will spend less on gas. Here is a simple example demonstrating cost avoidance with a Hummer and a Prius.
In procurement, we are measured by savings and the strength of the deals we put in place. But the best thing for the organization, would be to not spend it in the first place. That is 100% savings!!
Successful procurement organizations are reviewing many aspects in order to avoid spending the money at all. Is there a substitute product or process that will accomplish the same outcome but not the same expenditures? Is the cost of carrying inventory factored in? What if we could reduce usage overall? What about recycling revenue - is there anyway to take advantage of that?
Have you utilized cost avoidance? How much have you been able to keep in your company's wallet?