Overstretched and keeping up with numerous demands at your organization.
Managing a complex spend cube full of several challenging categories.
Satisfying the requests of stakeholders on the front line and in the c-suite.
Procurement teams are impressive in what they successfully handle with all they oversee. Here’s the thing though, meeting your budget goals doesn’t have to be so challenging or exhausting when you have a group purchasing organization (GPO) as part of your strategy.
The following finding from a recent DHL Express survey speaks volumes about the lingering effects of the pandemic on small and medium-sized businesses:
Global supply chains are still feeling the effects of countries and economies shutting down during the height of COVID-19. Over half of respondents said supply chain delays have been their biggest business challenge so far in 2021.
Securing reliable and on-time trucks to pick up your organization’s freight is a difficult task as the market faces increasing challenges of dwindling transportation capacity and skyrocketing shipping costs. Freight carriers continue to bump up their rates and report capacity constraints across all modes of transportation.
Delivery trucks often wait hours for a load. Some backlogs remain so severe that warehouses are forced to store rows of containers in parking lots. It’s not uncommon for shipping containers to sit for days at our largest U.S. ports.
Most organizations throughout the world are experiencing some type of skills shortage. In the US, some 83 percent of businesses are struggling to find workers with the right skillsets, according to the Society for Human Resource Management. Companies that can’t find the skills they need will continue to be at a disadvantage in the marketplace.
Being innovative is critical as procurement and supply chain industries are constantly evolving. Now you may be taking a closer look at how successful you’ve been at pivoting when needed, while remaining constant and stable as the marketplace changes.
Maverick spending is the action of purchasing from suppliers outside of approved procurement policy or rules. At its best it is minor leakage from negotiated supplier contracts, at its worst, it is uncontrolled spending. Maverick spend, which includes purchases of both goods and services, is particularly evident in most categories in manufacturing organizations.
Tail spend is the amount an organization spends on purchases that make up approximately 80% of transactions but cover only 20% of total spend. Tail spend often gets ignored and typically goes unmanaged. Strategic procurement and mid-tier categories that represent around 80% of an organization’s spend are where the major cost reductions can be found. But what about the other 20% of the spend, the tail?
The workload for a procurement professional continues to grow. Maybe while you’re reading this, you’re scrambling to finish multiple projects. While you have a track record of completing those tasks on your own, there is another route you can take to elevate your procurement strategy and productivity. Partnering with a group purchasing organization (GPO), as your advisor, has the potential to take your role as a decision-maker to the next level.
