What I experienced while working with vendors while aiming to cut costs first we should start by defining clear specifications & ensuring suppliers understand quality standards. Also Building long-term relationships to gain better pricing and services, we need to Benchmark market prices and negotiate win-win deals based on data driven pricing. Consolidating purchases to leverage bulk discounts and explore multiple suppliers for competitive pricing is helpful to Focus on total cost of ownership, considering lead time, quality, and logistics. Again Collaboration with suppliers to innovate and use cost-effective materials will Finally, build trust and transparency to foster flexibility and sustain partnerships.

Over my years of working with suppliers, I've found that working as 'true partners' often yields solid results. Too often focusing only on cutting costs we find that quality and customer satisfaction takes a back seat. We need our suppliers to be successful too. Otherwise, we might find ourselves spending more money looking for new suppliers and negotiating new contracts. We must be diligent about all our manufacturing costs by reviewing all aspects of the process. Don't forget to talk to your employees engaged in the manufacturing process as they may surprise you with ideas on how to do things more efficiently, reduce waste or have a design idea that could benefit both you and your suppliers. Make the most of every aspect of the business.

Start by understanding your needs and researching market trends to identify competitive pricing. Build strong relationships with reliable suppliers and leverage bulk or group purchasing for discounts. Use competitive bidding to encourage suppliers to offer their best prices, and negotiate terms such as flexible payments, free shipping, or faster delivery. Monitor supplier performance to ensure quality and reliability while benchmarking prices regularly. Diversify your supplier base to avoid dependency and explore local options to save on logistics Utilize procurement tools and analytics to optimize purchasing decisions, and secure long-term contracts to lock in favorable rates.

Firstly, before making any purchase, it is important to understand the real need to buy. To reduce costs in manufacturing, it is important to carry out a make or buy analysis, whether the acquisition has to be carried out internally or externally to the company. If the resources involved are within the company, it is possible to reduce the cost Validating that the organization does not have internal resources, it is recommended to carry out the acquisition within a fixed price contract so that costs do not vary over time, reducing risks to the buyer and transferring them to the supplier. The best way to do this is to always try to establish a win-win negotiation, where both parties are transparent and feel benefited.

Cost reduction is the business practice of reducing expenditures to increase profits. we can consider following parameters to Negotiate with Supplier's to get best deal - 1. Part / Product price 2. Incoterms 3. Payment terms 4. After sales-service Contract / AMC 5. Quality also you need to do basic research about supplier's business (Monopoly / common category), how / in what they wanted to grow in future and how you can use those info in your negotiation.

First you need to understand the product, uses its need. Some points to be considered. Build Strong Relationships: Establish trust and maintain open communication with suppliers. Consolidate Purchases: Combine orders across different product lines to increase bargaining power. Compare Multiple Suppliers: Get quotes from several suppliers to ensure competitive pricing. Explore Alternate Materials: Work with suppliers to identify cost-effective alternatives. Focus on Long-term Partnerships: Highlight the potential for ongoing business to encourage better terms. Flexible Payment Terms: Negotiate discounts for early payments or favorable payment plans. Analyze Total Costs: Consider shipping, lead times, and quality to optimize overall savings.

Build your relationship as sparring partners in both strategy and tactics. Build annual cost reduction targets for your supplier to be a part of, so both realize benefits of finding ways to reduce cost of manufacturing and purchase prices. Example: Can any of your specs be relaxed without affecting quality? Perhaps that would reduce supplier cost of manufacturing or incoming quality inspection delays. Understanding there will always be problems to manage between supplier and customer, how does the supplier score on responsiveness and timely resolution? Price competitiveness rarely enters the conversation when your production is stopped, your supplier is needed, and your customers are waiting.

In manufacturing cost is associated with efficiency. First, be sure you are reducing your waste: yield, out specs, rework, etc. must be optimized/eliminated. Then, you want to competitive prices, but also best quality products too. Be sure your MRO master data is current, divide raw materials, consumables, spare parts, etc. Look into the categories searching for high consumptions average, or high pick orders, then high prices and the combination of them. Those are going to be the priority for negotiation. Then, is necessary to find substitutes approved by production, process or maintenance as corresponded, stablish forecast base in production goals. With all those inputs, we go to a bidding process and try to stablish a good cost structure.

Localization of LLMs will be one of the options to reduce the material cost without compromising parts quality. Reducing waste through the Kaizen project will be the best choice. With this, we can have a higher gross margin in material/product cost and make the manufacturing line more lean/efficient.

Start by asking what things in your design are driving the costs, materials, tolerance, setup, lead time, qty etc and start chipping at ways to make adjustments on both sides to lower the costs for both and share the savings