Gartner Research

Gartner’s Supply Chain Cost Optimization Playbook for Sourcing and Procurement Leaders

Published: 20 March 2019

Summary

Cost optimization is a fundamental responsibility for sourcing and procurement leaders in supply chain. This research provides a framework and top ideas to optimize costs through both short-term tactical improvements and longer-term transformational changes.

Included in Full Research

  • Key Challenges
  • Operate Better by Improving Pricing, Policy Enforcement and Spend Management
    • Negotiate Better Pricing Conditions With the Supply Base
    • Improve Compliance With Policies and Contract Terms
    • Increase or Optimize Spend Under Contract
    • Increase Automation and Reduce Time Spent on Low-Value, Administrative Activities
    • Negotiate Directly With Subtiers for Raw Materials and Components Used Across Multiple Suppliers
    • Identify, Measure and Control Extraordinary Costs
  • Reconfigure Procurement Processes, Supply Networks and Product Specifications to Reduce Cost
    • Deploy Category Management for Improved Spend Visibility and Control Across the Organization
    • Outsource Noncore Process Activities to Suppliers and Other Third Parties
    • Engage the Supply Base to Identify Cost Optimization Opportunities
    • Reduce Working Capital Tied to Supply Operations
    • Revise Product Specifications to Eliminate Excess Quality and Reduce Material Costs
  • Transform Procurement Capabilities by Deploying Digital Strategies and Leveraging Extended Collaboration Networks
    • Deploy Digital Technologies to Automate and Optimize Manual Procurement Processes
    • Launch a Companywide Cost Optimization Program With Participation of Functional Leaders Across the Organization
    • Implement Total Cost of Ownership Models Across Critical Categories
    • Create Shared Value Partnerships With Strategic Suppliers and External Networks

Analysts:

Miguel Cossio,  Paul Lord,  Patrick Connaughton,  Sam New,  Andrew Knight

Access Research

Already a Gartner client?

To view this research and much more, become a client.

Speak with a Gartner specialist to learn how you can access peer and practitioner research backed by proprietary data, insights, advice and tools to help you achieve stronger performance.

By clicking the "Continue" button, you are agreeing to the Gartner Terms of Use and Privacy Policy.

Gartner research: Trusted insight for executives and their teams

What is Gartner research?

Gartner research, which includes in-depth proprietary studies, peer and industry best practices, trend analysis and quantitative modeling, enables us to offer innovative approaches that can help you drive stronger, more sustainable business performance.

Gartner research is unique, thanks to:
Independence and objectivity

Our independence as a research firm enables our experts to provide unbiased advice you can trust.

Actionable insights

Not only is Gartner research unbiased, it also contains key take-aways and recommendations for impactful next steps.

Proprietary methodologies

Our research practices and procedures distill large volumes of data into clear, precise recommendations.

Gartner research is just one of our many offerings.

We provide actionable, objective insight to help organizations make smarter, faster decisions to stay ahead of disruption and accelerate growth.

Tap into our experts

We offer one-on-one guidance tailored to your mission-critical priorities.

Pick the right tools and providers

We work with you to select the best-fit providers and tools, so you avoid the costly repercussions of a poor decision.

Create a network

Connect directly with peers to discuss common issues and initiatives and accelerate, validate and solidify your strategy.

Complementary related insights

Gartner clients can log in to access the full library.

Guide

What Tech Trends Enable Government CIOs to Meet Stakeholder Needs?
Article

What’s New in the 2022 Gartner Hype Cycle for Emerging Technologies
Podcast

The Biggest Lessons and Insights from Gartner’s Supply Chain Top 25
Research

Recession Playbook for Supply Chain Leaders
Research

Finance Skills & Occupations Trends Report
Research

Marketing Skills & Occupations Trends Report
Webinar

7 Key Trends That Will Impact Your Strategic Planning
Webinar

Key Strategies to Advance Your Supply Chain Through Economic Disruptions

Experience Gartner Conferences

Join your peers for the unveiling of the latest insights at Gartner conferences.

View Conferences

©2022 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. and its affiliates. This publication may not be reproduced or distributed in any form without Gartner’s prior written permission. It consists of the opinions of Gartner’s research organization, which should not be construed as statements of fact. While the information contained in this publication has been obtained from sources believed to be reliable, Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Although Gartner research may address legal and financial issues, Gartner does not provide legal or investment advice and its research should not be construed or used as such. Your access and use of this publication are governed by Gartner’s Usage Policy. Gartner prides itself on its reputation for independence and objectivity. Its research is produced independently by its research organization without input or influence from any third party. For further information, see Guiding Principles on Independence and Objectivity.