Purchasing professionals are constantly being tasked to do more with less. There is an ever-growing savings goal and an unmanageable number of suppliers/categories to be responsible for, in addition to improving long-standing contract savings and service-levels, benchmarking results on current contracts and overall market trends, and satisfying end-user stakeholders’ priorities, unique needs and goals. Group purchasing organizations (GPOs) can narrow the scope of priorities for procurement as they take on and deliver on the most important value drivers.
Group purchasing organizations (GPOs) primarily exist for one simple, yet compelling reason: to help businesses interested in buying similar products gain leverage through combined purchasing power.
A study by The Hackett Group defines a group purchasing organization as “an entity that is created to leverage the purchasing power of a group of businesses in order to obtain discounts from suppliers based on the collective buying power of its members.”