Smart Procurement Strategies
Utilize Should Costing and MLPP to enhance negotiation leverage, improve cost transparency, and achieve significant savings in procurement.
Start with Clarity: Why Method Matters
Procurement negotiations are often clouded by unclear or legacy pricing. Without data, you’re negotiating blind. Should Costing and MLPP provide two powerful tools for illuminating true cost structures and building leverage with suppliers.
Procurement’s Dilemma: Data Gaps and Missed Savings
Procurement leaders are under pressure to cut costs and justify pricing—yet supplier cost data is often lacking. Historical price points rarely reflect reality, and without transparent analysis, companies risk poor benchmarks, overpayment, and weak negotiation positions.
A Smarter Way Forward: Two Tools, One Goal
H&Z equips clients with Should Costing and MLPP to turn uncertainty into opportunity. Should Costing uses manufacturing logic to analyse key components in detail. MLPP applies statistical models to broader product sets, indicating fair market pricing. There is no one-size-fits-all. That’s why H&Z developed a decision framework that puts context first.
From Insight to Advantage: The H&Z Approach
Should Costing works best when deep-diving into specific, complex components. MLPP excels when comparing large sets of similar products. This ‘T-shape’ approach empowers teams to act strategically, scaling deep insights into a single product or across categories. In selected cases the combination of both tools can deliver further insights: The cost gap of selected Should Cost calculations on article numbers can be transferred to the entire category using (M)LPP.
Real Results: Insights That Scale
One H&Z client uncovered a 17% price gap through Should Costing on a single component. MLPP then validated this insight across the entire category, delivering significant savings. This method not only enhances supplier transparency but also builds internal confidence in procurement decisions.
