8 Proven Strategies to Cut Costs in Your Procurement Process
Cost control is always a top priority for procurement and supply chain leaders. But in 2025’s volatile global environment—rising raw material prices, shifting tariffs, and complex logistics—identifying true savings requires more than negotiating lower prices. Strategic procurement involves long-term thinking, deeper supplier collaboration, and smarter sourcing decisions.
Below, we outline eight proven strategies that help companies optimize procurement spend while maintaining quality, delivery, and risk control.
1. Conduct In-Depth Supplier Identification and Vetting
Choosing the cheapest supplier upfront can lead to hidden costs later—from delays to quality issues. Comprehensive supplier vetting ensures your vendors are financially stable, compliant with certifications like ISO 9001, and capable of scaling with your needs.
At EDS, we perform on-site audits and validate quality systems using a structured supplier qualification process, ensuring long-term savings and reliability.
2. Consolidate and Rationalize Your Supplier Base
Fragmented supplier networks often lead to missed volume discounts and higher administrative costs. Consolidating suppliers—especially within the same product category—can unlock better terms, streamline logistics, and simplify quality control. However, it’s important to avoid over-dependence on a single source.
Creating strategic partnerships with multi-capable vendors also provides access to co-engineering and shared development efforts, reducing time-to-market.
3. Source from Cost-Effective Regions
Global sourcing remains a powerful tool—but only when aligned with market realities. Many companies are moving away from China-centric sourcing strategies and diversifying to India, Vietnam, or Mexico to lower labor costs and mitigate geopolitical risks.
Our insights on India’s rise as a sourcing hub highlight how smart location decisions can reduce landed costs and enhance supply chain resilience.
4. Improve Forecasting and Order Planning
Rushed orders, emergency shipments, and stockouts all increase procurement costs. Implementing accurate demand forecasting and planning longer lead times helps consolidate shipments, avoid air freight, and reduce per-unit pricing.
Aligning your planning team closely with procurement reduces unnecessary inventory buildup and improves vendor responsiveness.
5. Design for Manufacturability (DFM)
Collaborating with suppliers during the early stages of product development can identify opportunities to simplify designs, reduce waste, and select more cost-effective materials.
Our engineering optimization services help clients redesign components for cost, performance, and ease of production without compromising quality.
6. Use Should-Cost Analysis
A should-cost model breaks down the expected price of a component based on raw material, labor, overhead, and profit. When suppliers’ quotes deviate significantly from the should-cost estimate, it creates an opportunity for negotiation—or reevaluation.
This approach also helps uncover inefficiencies or potential overpricing, leading to better cost control and transparency.
7. Leverage Total Cost of Ownership (TCO)
Don’t focus solely on unit prices. TCO accounts for all cost factors including freight, warehousing, duties, rework, and compliance. This holistic view of procurement spend helps identify where small changes can lead to major long-term savings.
Dual sourcing, nearshoring, or alternative material choices often reveal surprising efficiencies once TCO is calculated.
8. Invest in Strong Supplier Relationships
Suppliers that feel like partners—not adversaries—are more likely to provide cost-saving ideas, early warning of disruptions, and prioritized support. Establishing open communication, joint KPIs, and multi-year agreements fosters collaboration that delivers value beyond pricing.
A strong supplier relationship reduces risk and enhances innovation across the supply chain.
Partner with EDS International to Unlock Real Procurement Savings
At EDS International, we don’t just find suppliers—we create sourcing strategies that reduce your procurement costs without sacrificing quality or reliability. With vetted factories across India, Vietnam, Mexico, and beyond, we manage everything from price benchmarking to quality control and logistics.
Ready to optimize your procurement process? Contact us to learn how we can help you achieve long-term cost savings.
EDS International—Your strategic sourcing partner for precision, performance, and savings.
