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.