How does the Cost Containment Process work?

Trying to handle hundreds and/or thousands of vendors and vendor information is frustrating and inefficient.

Establishing a database with all relevant Accounts Payable, Vendor Accounts, Maintenance Service Agreements and information enables reports to be generated that allow the Cost Containment functions to be broken down into manageable pieces.

Keeping track of expiration dates and contact notes enables managers and staff to stay coordinated. 

Vendor costs should be addressed every 6 to 12 months with contact histories, negotiation strategies and general comments available to the internal staff.

Why is Cost Containment so important Today?

We are in a changing economic world.  Efficient operations will survive while inefficient operations will be taken over by others or be forced out of business.

Foreign competition, automated production and the changing way we do business have forced all enterprises to reevaluate the way costs and vendors are managed.

Business that are entrenched in the old ways of doing business will not survive.

Negotiations with Vendors is an ongoing process.

All Vendor relationships now must be managed to achieve the lowest possible costs with the most cost effective services.  All existing Vendor agreements must be reviewed and analyzed on a regular basis. 

This process has saved ATI clients millions of dollars.

Reduce Maintenance Costs:

In order to reduce maintenance costs existing agreements must be reviewed.

Evergreen Clauses (automatic renewal clauses) must be avoided at all costs.

Understanding the maintenance agreement and what exactly is covered requires reading the existing maintenance agreement and defining the costs and services.

Working with the staff and finding out the quality of the vendor, the items the vendor has serviced over the past 6 months to 2 years, the frequency of vendor visits, the staff evaluation of the vendor and other relevant information enables negotiation strategies to be developed.  Group strategy discussions are best when trying to find the most effective negotiating strategies.

Patients and persistence will prevail.

Procedures for Purchasing New Services:

Always require at least three bids for each substantial purchase.  Never take the first vendor that arrives on the scene. 

Require that contract documentation be presented in a readable and understandable format.  Make the Vendor highlight and define all relevant sections of the Vendor agreement.  Make the Vendor explain all terms and conditions that are confusing in a simple readable restatement.  Don't ever hesitate in making the Vendor change any terms and/or conditions that are confusing and/or uncomfortable.

How Do I Get the Lowest Prices for Items?

As China continues to expand its production and other Third World Countries follow costs will continue to decrease for the near and possibly the long term future.

Make sure all supplier agreements are either very short or have lowest price guarantees that if prices fall either the vendor will match the lowest price and/or will allow early termination without a penalty.

Why would I deal with ATI?

Cost Containment has become so complex that in order to handle the process efficiently experts from a number of areas must be assembled.   ATI has over 50 experts working on services as varied as Waste Disposal, Accounts Payable, Facility Management, Insurance, Telecommunications, Procurement Services, Leases, Utilities and Managed Travel as well as other specialized cost reduction areas.  These experts have many years of experience and are trained and specialize in reducing your costs.

OUR PROMISE TO YOU: "We have developed services, systems and database tracking systems so you will have the most cost effective Procurement Services possible.  We  inventory your equipment and  services and make recommendations that best support your Cost Containment goals.  ATI will be able to work with your existing vendors and develop  saving suggestions that will substantially reduce your procurement costs and your service provider costs.   We do not work for vendors we work for you." 

We hope you will look forward to the Communicator and would appreciate any feedback that you would like to provide. 

Please email comments to dc@auditbills.com

ATI Cost Containment and Management Services

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