A major worldwide survey of “Future Trends in Procurement” was conducted by Future Purchasing, with the active support of professional institutes and universities worldwide. The findings provided useful insights into the opportunities, challenges, accelerators and barriers faced by procurement professionals and business leaders within their organisations. Regular updates and Insight Guides from our ongoing practitioner-focused research programme have been produced and circulated via our web site.This Insight Guide covers the range of initiatives that can be pursued for cost and value management strategies with third party suppliers. The intention of these short guides is to highlight the widest range of options and initiatives being employed. We illustrate the considerable differences that exist between moderate performers (the improvers), superior performers (the leaders) and radical performers (the pioneers).
Our worldwide survey, involving over 1,100 practitioners, showed that improvement of profitability, margin and earnings per share is one of the top three priorities for procurement professionals over the next three years. Two-fifths of survey respondents were being challenged to save between 2% and 5% annually across their total expenditure. Managing the financial leverage through business-wide procurement transformation has never been more important. Remember that this has to include cost, cash and also capital. This will be examined further in subsequent Insight Guides.
Through our practitioner-friendly research programme, nine broad options in cost and value management have been identified, together with 27 associated initiatives being pursued by different types of company within their market sectors worldwide. The challenge is to identify the priorities that are most relevant for your company, and then to assess your team capabilities in deploying these initiatives. By doing this you can identify the cost and value management competences that are most relevant for your organisation and which need to be strengthened.
Making purchasing cost and value management a core competence has become increasingly important, particularly at a time of very tough market conditions. Nine major options for cost and value management have been identified. Please assess your priorities for action and then your current vs. required capability to deliver them successfully.
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