Cost reduction is king in 2011

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31 December 2010 | Angeline Albert

Cost cutting is the priority for 2011 for nearly half of buyers, according to the latest SM100 poll.

In answer to the question “what is your main priority for procurement in your organisation in 2011?”, 46 per cent of the respondents cited cost cutting.

Supplier relationship management, including continuity of supply, came second with 18 per cent of buyers putting it above anything else.

John Witkowski, a buyer for laminate products distributor Plasman, said: “We have spent the past two years or so cost cutting, and there is very little left to cut. We will continue to monitor costs of course, but now it’s time to ensure that our suppliers – who, like everyone else, have felt the pinch in these tough economic times – continue to supply us as we require, so that our business is not affected.”

Gaining control of more spend areas ranked third place overall, with 14 per cent of respondents picking it as their priority for 2011.

A total of 10 per cent of respondents said none of the provided options came first. Sustainable procurement received 4 per cent of the votes.

Raising the profile of the profession was the key aim for 5 per cent of buyers, while 3 per cent said increasing outsourcing was their chief goal for 2011.

One buyer from the advertising sector, who did not wish to be named, said: “No matter what anyone says, the absolute primary aim of a purchasing organisation has to be cost cutting – gaining maximum value for every pound spent.”

The majority of respondents who cited cost cutting as their priority for the year ahead said all other considerations stemmed from this.

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