MORE DETAILS
Agenda
The first meeting will allow you to define your real needs, in terms of Purchasing Actions and/or support for your Purchasing teams, or even theoretical training.
This last point is not strongly promoted, as there are many firms that are very competent in the field of training. However, if during the mission, the client wishes to upgrade one of his team members, this remains possible.
The first step is therefore the signature of a Non Disclosure Agreement (NDA) between the two parties, without any future commitment for an assignment.
This agreement allows Diara Conseils and its client to exchange confidential information and data without preconceived ideas and in complete confidence.
Our discretion also makes our reputation…!
From there a schedule is established, for the evaluation of the service and the proposals that follow, as well as the future signature of a multi-year contract.
Mission's Perimeter
This is a very important step, still at this stage without any commitment, and is based on an analysis of the customer’s purchasing data over the last two to three fiscal years.
We mainly need the following information :
1 – Annual expenses by suppliers/plants.
2- Material prices / purchasing unit / annual volumes / Suppliers.
Based on this data, DIARA Conseils evaluates the Client’s price positioning and makes a presentation containing recommendations and potential savings targets.
This first study is FREE OF CHARGE, because Diara Conseils can fully consider the fact that its Client already has an excellent Purchasing position and does not need any further Price Advice.
It is on Diara’s recommendations that the client will choose the Purchasing Families to be “worked on” and therefore the portfolio of expenses entrusted to Diara Conseils.
By contract, this portfolio will therefore be detailed, as well as the schedule of the mission, by its start and end date as well as the start and end dates of the earnings calculation, this on the basis of an estimated budget.
Purchasing Budget
We know from experience that a budget is a budget, and that markets are sometimes very volatile.
This is why, once the contract is signed, the client does not commit to a purchasing budget, nor does DIARA commit to an amount of savings…But we will negotiate new prices, based on the upcoming budget and the remaining volumes to be purchased, if the mission starts during the course of the year.
We insist on the fact that it is important to have a mission schedule that runs over a minimum of two budget years, because the results of negotiations and supplier relations can be strongly impacted.
The common interest is to make savings quickly of course, but we want to perpetuate these gains which are the guarantee for our client of a competitive final selling price, over the coming years, as well as sustainable profitability.
Savings Calculation Mode
Only real savings are calculated…!
Clearly and in detail, we define in the appendices of the contract, the real prices, paid or in progress, at the date of the beginning of the mission, and this reference by reference.
From this fixed base, Diara negotiates more competitive prices with the suppliers, and ensures that these new prices are effective as soon as possible.
The calculation of the gains is made, from the first volume ordered at the new price, once the materials have been received in the customer’s stock, this over a period of two years from the date of the order.
The gain is defined as the difference between the old price and the new price (multiplied by the volume purchased), including Annual Rebates, bonuses and any element of negotiation, and excluding the variations of market indices.
Reporting
Every month, Diara Conseils will send an activity report (3 to 4 pages), summarizing the actions in progress, the blocking points if any, those requiring a management position, and a table of the actual savings achieved.
The calculation of the gains being made jointly by both parties, the generated savings are shared each month, during the whole mission, up to 65% for the Client and 35% for Diara Conseils.
A monthly invoice is thus issued (payment at 30 days end of month).
Travels & Operational Costs
For a good mutual understanding and good supplier negotiations, it is important to visit the factories.We only do what is strictly necessary, telephone and e-mails remain effective preliminary tools.
However, our clients will take charge of all Diara Conseils’ trips.
This on the basis of rates Economy Class for the plane, 2nd Class for the train, and Category B for car rentals.Hotels will be booked on the basis of three stars in the European Community or their equivalent.