Stop Thrashing Your Suppliers: Focus on value and profits, not just cost, in the sourcing process

Because external spending is the largest cost center for most companies, many firms have done the obvious things to cut costs in procurement, such as renegotiating contracts with suppliers and consolidating big-volume purchases. But these tactics, which focus on one-time supplier price reductions, cannot drive long-term performance gains.

Managers need an approach that allows them to realize and sustain high returns on their investment in improving … [ Read more ]