StrategicSource Blog

The go-to blog for spend management best practices, that provides articles and videos on achieving cost savings and managing suppliers, as well as insights into how to be the most effective purchasing department for your business. 

The Ultimate Guide to a Purchasing Strategy

Purchasing Departments or Spend Management functions are a given in most larger organizations.

They are typically charged with:

  • Sourcing the suppliers of services and supplies
  • Gathering business requirements
  • Building quotes and analyzing results
  • Negotiating with suppliers
  • Awarding businesses
  • Implementations
In companies with direct materials responsibilities, the Purchasing Department also manages inventory levels, delivery performance, quality levels, service levels, and more. 
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How Leadership Can Make Profitability Improvements Stick

Many organizations’ profits are being challenged by compressed margins, growing expenses, flat sales and greater competition. As leaders, it is up to us to have plans in place to prevent that profit erosion and have the data, tools, reports, metrics and strategies to manage through to better results and targeted profitability.

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Sourcing Solutions to Improve Your Gross

A high-performing purchasing or sourcing group can make contributions to the business in a number of ways. Most people think of purchasing groups in terms of their ability to reduce costs and improve overall profitability and that is the probably the greatest focus of most groups. Additionally, purchasing’s role in the supply chain is to also ensure that the “right goods are procured, at the right cost, at the right time, at the right quality levels and in the right quantity and delivered to the right location”.

Purchasing teams can also have an impact on the administrative impact of a business by ensuring that a narrow, high performing supplier base is in place vs. a large, bloated, inefficient supply base that reduces leverage and adds costs. High performing Purchasing groups can also impact your gross profits in a positive way… many more category areas than you might have first thought.

The categories that make up goods and services that are ultimately resold to your customers are many and offer some real significant opportunities to buy for less, increase your mark-ups and sell for more - improving your gross.

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Is Your Cost Reduction Tactical or Strategic?

Most business organizations find themselves involved in cost reduction initiatives from time to time. To sustain an organization over the long term, cost reduction efforts need to become deeply ingrained in the business structure itself and that is usually accomplished through a Spend Management or Purchasing Department. Purchasing is typically charged with sourcing, quoting, negotiation, implementation and supply base management responsibilities including compliance audits.

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How to Make an Ineffective Spend Strategy an Effective One

The implementation of a Spend Management Vision – a dedicated function within an organization is very common in most large organizations. While most organizations that have a Spend Management Vision and Department realize the benefits and efficiencies, organizations that do not have those functions resident in their organizations probably do not realize the costs of being highly decentralized.

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