More spend the key to greater savings and control

27 May 2011

27 May 2011 | Angeline Albert

Handling new categories of spend will be the best way of achieving cost savings in the year ahead, according to US buyers.

But, according to a short poll of delegates at last week’s Institute for Supply Management annual conference, this would not be the only method procurement teams will use to look for cost reductions.

Some 32 per cent of purchasers polled believe the answer lay in bringing more spending under procurement’s control, 28 per cent said company-wide visibility into spending is the key to keeping costs down and 23 per cent think ending maverick buying would make the biggest difference. 12 per cent believed tackling spend on commodities more effectively would save more money. The remaining 5 per cent highlighted other options.

“The results of the pulse survey reflect what procurement teams have always said – they can’t control what they can’t see,” said Henry Hwong, vice-president of product marketing at e-procurement firm ReardenCommerce, which conducted the survey.

He added the challenge of controlling costs is especially complex in the areas of travel and expense management.

“The growing trend where cost increases are passed directly onto the buyer in the form of ‘unbundling’ of fees such as fuel surcharges make it especially hard for procurement teams to truly keep costs under control. It’s here – where procurement has little visibility or control over what’s purchased – that costs can quickly rise, well beyond what’s expected.”

The survey also found 60 per cent said consolidating the supply base is critical to controlling costs. Rearden surveyed 55 buyers at the event in Orlando, Florida last week.

Birmingham, West Midlands
HS2 Ltd
London (Greater)
£50,800 plus up to £10,000 Recruitment Retention Allowance
House of Lords
CIPS Knowledge
Find out more with CIPS Knowledge:
  • best practice insights
  • guidance
  • tools and templates