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Bettering cost reduction

While it is right that all organisations - clients, house builders, local authorities - have a focus on cost reduction, it is important to consider how best to go about it.
The most effective solution is never a blanket demand to reduce invoices from across the supply chain by a standard percentage.

This can be counter-productive as it alienates suppliers and forces them to submit low tender bids, which will more often than not have to be revised upwards to protect profit margins.

Instead, it is in the interest of all parties to build collaborative relationships that protect the profit margins of all across the supply chain.

In this way, all parties can be financially incentivised to identify cost savings. This provides a more effective solution for all.

Dr Neil Jarrett
Chief executive
CWC UK Limited