This PPT slide, part of the 80-slide Value Managed Relationships Analysis PowerPoint presentation, outlines the Value Managed Relationships (VMR) process, which is a structured approach to identify and capitalize on savings opportunities within supplier relationships. It begins with identifying VMR opportunities, focusing on selecting products based on purchasing volume and their added value. This initial step is crucial as it sets the foundation for the entire process.

Next, the slide emphasizes understanding the industry cost structure. This involves analyzing industry economics to formulate savings hypotheses, which are essential for identifying potential areas of cost reduction. The selection of VMR candidates follows, where suppliers are analyzed to determine the best fit for the VMR strategy. This step ensures that the most promising suppliers are targeted for deeper engagement.

A critical aspect of the process is obtaining top management commitment from both the client and supplier. Without this commitment, the likelihood of successful implementation diminishes significantly. The slide then highlights the identification of specific cost reduction opportunities. This involves conducting detailed analyses to validate the earlier hypotheses and quantify the potential savings.

Finally, the process includes tracking VMR savings. This ongoing assessment ensures that the progress of savings and the health of the relationships are monitored effectively. By following this structured approach, organizations can enhance their supplier relationships while driving significant cost efficiencies.

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Customer-centric Organization Customer Profitability Cost Reduction