.jpg)
A cost reduction of 2.4 million euros by comparing expenses to market standards and strategically optimising contracts. Ronald Batenburg explains how this company strengthened its margins without putting supplier relationships under pressure in his expert blog.
Where was the profit hidden?
Bystronic is a global leader in advanced laser systems and automation. The company already had a professional purchasing department and long-standing relationships with regular carriers, insurance agents, and suppliers of telecommunications and IT solutions. Nevertheless, in practice, many cost items proved to be structurally too high.
The continuously rising prices in logistics, insurance, and ICT were accepted by the internal organisation but rarely strictly compared with the market or re-examined. This constitutes a blind spot for many companies: existing habits and long-term partnerships sometimes block the view of potential savings.
Tip: Take a critical look at all your cost categories, even (especially!) if they have appeared to have been stable for years. The statement: 'we have been doing it this way for years…' is a first indicator of optimisation opportunities. Scans by an external party can provide valuable new insights.
Critical benchmarking: capacity and market knowledge
Bystronic's management realised that there was insufficient in-house capacity and market knowledge to conduct truly critical benchmarking. Therefore, our assistance was enlisted to scrutinize the entire expenditure pattern without emotional attachment or daily burdens. This yielded surprising insights into, among others: Road Transport & Sea Freight, Small Parcel Logistics, Insurance, Telecommunications & IT, and Workwear. By focusing not only on rates but also comparing contract terms, service levels, and alternative suppliers, a broader picture emerged, enabling savings that their own employees had overlooked.
Tip: Have an expert periodically review your most important contracts, rates, and processes. Experience shows that your regular suppliers are often willing to optimise the collaboration, especially if they can implement improvements. This is true collaboration between parties.
No hassle, just better margins
The biggest objection for many companies is that cost savings always lead to hassle with suppliers or a loss of quality. Yet the Bystronic case proves the opposite. The collaboration with ERA Group led to substantial structural savings (USD 2.4 million per year) without the relationship with existing suppliers deteriorating, and without operational disruptions. Some ways in which this was achieved include: optimising processes jointly with suppliers instead of simply cutting rates, and aligning contracts more carefully with realistic market conditions.
Tip: An external negotiator often achieves more than an internal team because they are independent and bring knowledge of the current market situation, without jeopardizing personal relationships.
What learning opportunities does this offer companies?
Just as in the transport sector, there are significant differences within the manufacturing industry regarding cost drivers, the impact of customer segments, and the return on products or services. The key lessons from the Bystronic case: do not try to do everything yourself; external expertise pays off. analyse where invisible waste exists per category. Continue benchmarking, even if existing relationships are good. Focus not only on price, but on all contract conditions. Moreover, do not forget the indirect costs: overhead, service levels, and efficiency.
Concrete savings
Most savings were not found in the lowest bids, but in smarter contract structures and joint process optimisation. Small items, such as workwear, proved to be structurally cheaper and of better quality to supply from alternative suppliers. Substantial discounts and operational benefits were secured through bulk purchasing and technological improvements in telecom. Continuous consultation (quarterly) with the external specialist proved indispensable: ongoing monitoring prevents old 'inefficiencies' from returning to the collaboration.
Tip: Take a look at your most routine expenses yourself as if you were a new customer. What would you pay attention to if you had to choose again tomorrow?
Prevention is better than cure
The biggest pitfall for growing companies: as revenue and production increase, inefficiencies and cost excesses slowly creep in. By periodically taking a 'fresh look' at the entire purchasing and cost picture, margins remain healthy and financial room is created for innovation and growth.
Tip: Always clearly separate your profit target from revenue. Growth without a return is not an achievement!
The difference between keep running or really moving forward
Many companies are perfectly capable of 'keeping hard' for years without structural innovation. However, Bystronic's results show that it is precisely a critical attitude towards fixed patterns and an open external perspective that make your enterprise more agile and profitable. This is not a matter of working harder, but primarily of doing business smarter.
Tip: Dare to question existing habits. Anyone who relies solely on past successes is guaranteed to autumn behind.
Conclusion: smarter business leads to more sustainable winning
Bystronic proves that even in demanding sectors with complex logistics and high personnel costs, savings and returns remain possible without stress or disputes with suppliers. By critically benchmarking per cost category, engaging external expertise, and focusing on sustainable collaboration, you achieve immediate and lasting results – with the same team and the same dedication.
So: take a fresh look at your own organisation and break free from the routine of always working harder. Smarter business yields much more profit and peace of mind, and that makes it not only more enjoyable but, above all, much more sustainable. Hats off to anyone who dares to deviate from routine and truly make a difference.
