Aggressive Input Changes

Changing the qualifications of input materials to make them simpler, more effective, and cheaper is another important lever. Major savings can be achieved by partnering with the R D, manufacturing, maintenance, and marketing functions to define dear customer spedfications and to determine the requirements on fitness for purpose or quality that will prevent over-engineering and enable purchasing to source the most cost-effective raw material for the application. 

It is sensible to take the attitude that it must be possible to simplify or substitute inputs. The purchasing function as a whole just has to be determined enough in benchmarking across business units and suppliers. Selecting a few products and comparing them across business units typically uncovers substantial value. 

suppliers in low-cost countries have proven to be a particularly important source of improvements in creating innovative and highly effective products at low cost, leveraging low cost input and capabilities to develop attractive products for local markets. 

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