Development of purchasing can boost profits

27 November 2003
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27 November 2003

Poor development of purchasing activities could cost companies a 30 per cent rise in profitability, according to a recent report.

Research into UK cross-sector procurement strategy by strategy consultants PIMS Associates shows marketing and sales often receive up to 75 per cent more investment than purchasing.

Zena James, spokeswoman for PIMS Associates, said: "Few businesses seriously assess their purchasing activity or invest in its development. As a result, companies may be spending money on items they do not need and spending too much on the things they do need."

The research also suggests that applying a strategic approach to a poorly purchased good or service can generate a 20 per cent saving.

SMnov2003

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