Published: 24 June 2024
Chief procurement officers often have lofty cost reduction targets that can be difficult to achieve. This research offers cost optimization strategies that focus on immediate cost-cutting improvements, midterm process reconfigurations and long-term transformational changes.
Strategic sourcing and leveraging spend has been cited as the most important priority for procurement leaders in 2024. Chief procurement officers (CPOs) are struggling to drive cost savings in the aftermath of increased cost pressures and risks caused by persistent inflation.
Savings reported by procurement leaders are often limited to reductions in unit or total prices of goods and services. Focusing solely on securing discounts and reduced prices from suppliers may still result in increased costs if quality, reliability and total cost of ownership (TCO) are not considered in the calculation value of cost savings tracked by organizations.
Cost-saving
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Analysts:
Doohan Vaz, Joe Stephens, Michelle O'Sullivan, Ryan Polk, Meghan O'Doherty, Cori Masters, Sam New
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