Profit from the Source

5

Cut Costs—Fast

Demand Up-Front Double Savings from Your Top Suppliers and Double Down on the Rest

The pressure on CEOs to cut costs never goes away. In a crisis, such as the one triggered by the Covid-19 pandemic, the pressure is existential: to ensure the survival of the company. But even in good times, CEOs face pressure to cut costs so that they can free up resources to expand into new markets, create new innovative products, or conduct mergers and acquisitions. In such moments, CEOs look to the CPO. In their eyes, the CPO was put on earth to deliver cost savings first.

The trouble is that the way CPOs are expected to deliver cost savings is limited—and ultimately damaging for the company. In most companies, as we have shown, the procurement ...