Managing Indirect Spend: Enhancing Profitability Through Strategic Sourcing

Preface

MANY LARGE ORGANIZATIONS, whether publicly traded services companies with no procurement department, large industrial manufacturers that allow each plant to purchase independently without leveraging volumes, or healthcare providers that have relied on their group purchasing organization to effectively manage budgets for them, still do not know how to achieve substantial cost savings on all of the “stuff” they buy. The people burdened with these tasks often do not know where to begin. It is for these beleaguered souls that this book has been written.

In our experience, resources for these types of companies are sorely lacking. Many consulting firms and analysts pitch sourcing optimization and a variety of other buzzwords with which they seek to replace the term strategic sourcing. For some reason, people have begun to associate strategic sourcing with the standard three-bids-and-award process that most companies have been using for decades. They all believe they are sourcing strategically, therefore management does not see the need to provide the proper people, technology, time, and training to effectively manage spend and look for cost-reduction opportunities. Industry analysts and other experts are already looking to identify the next big thing—calling strategic sourcing irrelevant, outdated, or ineffective—while their customers continue to struggle with getting their arms around the basics of what it means to source strategically.

WHAT THIS BOOK WILL DO FOR YOU

Whether ...