Manager Decide
Focus on Key Suppliers and save
A Hackett Group study reveals that companies can save up to 5% of their procurement spending by reducing the number of Suppliers and focusing on spending with certain key Suppliers.
World-class procurement organizations typically spend 27% less on the procurement function and operate with 38% fewer staff.
According to the study, world-class companies have less than half the typical number of suppliers (3,408 suppliers per billion dollars of spending versus 7,805 suppliers per billion dollars of spending for the typical firm).
The implications are more than simply saving procurement costs. Reducing the number of suppliers also allows a company to build stronger and more strategic relationships with its suppliers.This then translates into again in purchasing leverage and simultaneously lowers the cost of ongoing suppliers monitoring and management.