Data Collection
We gather detailed member spend data regularly so that it is available for our category management activities and also for rapid distribution to members when needed.
Procurement teams and budgets are shrinking. Procurement transformations drag on and on. Sourcing projects are delayed while another RFP update occurs. Companies turn to CoVest when facing these challenges for assistance in creating more procurement value.
As a group purchasing organization, CoVest utilizes the aggregate spending power of its members to create leveraged agreements with industry leading suppliers across a vast array of indirect categories.
CoVest focuses on combining the spend of members that are in and of themselves very large corporations. The reason for this focus is cost to serve – all of our members represent a similarly cost efficient customer to our suppliers due to their size. Combining these large, low cost-to-serve companies creates a program that is beyond what our members can reach alone where everyone benefits from the aggressive pricing that results.
CoVest, along with its members, focuses on categories where leverage can drive differentiated pricing and contract terms. Many indirect categories fit into this classification due to their low spend levels relative to the overall size of the business.
The benefits of leverage certainly start at driving a lower price, but reach far beyond. Our contracts are structured and managed differently. Our key items enjoy fixed, aggressive pricing, and the list is re-written regularly to ensure a tight fit with current spend patterns. Our blanket discount levels typically are driven to far more advantaged pricing levels than members can achieve individually. Our team spends far more time managing the specifics of each category than our members can afford as the spend levels in these categories are small for each member but very significant for CoVest. Lastly, our relationship with suppliers tends to reach higher in the organization and allow us to escalate issues more quickly on behalf of our members.
CoVest Category Development Process
Our category development process, whether beginning a new category or revisiting an existing category, comprises input from our members at every step of the way.
When developing a new category our members’ experience with a supplier is a key input into the sourcing process. And due to the number of members involved we typically have experience across the group with a large share of the major suppliers in the industry.
With the assistance of category subject matter experts from our strategic partner A.T. Kearney, our experienced sourcing professionals develop CoVest supplier agreements for our members. A rigorous seven-step strategic sourcing process is followed utilizing state-of-the art technologies and methodologies including expressive bidding, reverse auctions and best practice negotiations.
We understand that best price does not equate to optimal Total Cost of Ownership. We work with suppliers who are committed to driving down our members’ cost beyond the initial price savings, while developing a pricing and service model that’s tailored to the spend practices and needs of each of our members.
Our Category Management activities extend beyond strategic sourcing and category development to include ongoing cost reduction and supplier management. Together, these activities represent a key component of our value proposition.
We gather detailed member spend data regularly so that it is available for our category management activities and also for rapid distribution to members when needed.
We report category level savings quarterly to our members, and can create customized sales reporting if a member has unique needs.
We provide SKU rationalization feedback, develop alternatives programs and advice on supplier reduction opportunities.
We regularly engage manufacturers to negotiate deviated pricing that our distributors pass on as savings to our members
As a part of our commitment to ongoing cost reduction we annually re-write both group and member level core lists to ensure that they closely match member spend patterns and reflect the increasing leverage of CoVest.
We work with our suppliers to develop an implementation plan that meets your needs. Plan includes regular status calls, on-sight visits, timeline, email and marketing communication pieces and educational training seminars.
We conduct annual analyses to ensure our members have paid the correct negotiated prices.
“Fisher Scientific and CoVest Sourcing Network have enjoyed a long-term relationship and worked closely to service and support our joint customers. This agreement has helped Fisher Scientific gain new customers, strengthen relationships, and increase sales. This has been a win-win situation for both of our organizations.”
“The experience has been very positive working with CoVest. I feel as though this relationship is a partnership with a shared goal of providing the very best in services and representation for my customer. I feel as though we both have the same goal and really work toward making sure that the customer is wowed by what we can provide.”