Deloitte’s recent 2017 Global Chief Procurement Officer survey noted that enterprises remain focused on driving down costs and consolidating spend. Indirect spend categories are attracting more attention as companies recognize the important opportunities for savings they hold. As such, those folks tasked with managing indirect spend categories like office supplies and solutions face unique challenges.
A changing market
The office supplies market is evolving and navigating the current market landscape for office supplies can prove challenging. A limited number of suppliers hold the majority of market share, and it’s more difficult for procurement teams to negotiate competitive pricing. Additional competition from other sources like online retailers, discount stores and warehouse clubs add a layer of complexity.
So, what are your options to secure better pricing and contract terms for office supplies while still buying from a trusted supplier? GPOs have the purchasing power of all of their members, which drives more competitive pricing and better contract terms. In fact, according to a study by The Hackett Group, companies using a GPO can expect to see an average of 6% savings above and beyond what they could achieve on their own.
Long to-do lists, limited resources
While reducing operating costs and maximizing efficiency remain key focus areas for businesses, procurement – like most other functional areas – faces constant pressure to do more with less (and do it faster). Limited time and resources means that procurement must prioritize the management of certain spend categories over others – typically with the more complex, strategic categories getting the most attention. That (understandably) leaves categories like office supplies fairly less monitored and less managed. But, procurement has an opportunity to drive value by dedicating resources to effectively managing indirect categories, like office supplies, that are often overlooked. Sound familiar?
If yes, once again the GPO model may be a fit for your organization. Modern GPOs (like Corporate United) dedicate category management resources to ensure the agreements they have with their supplier partners deliver results.
In this scenario, your team gets the best of both worlds – your office supplies contract is closely monitored and managed to ensure that you’re not missing opportunities for savings and that suppliers are delivering on agreed upon terms, and your team gains time to focus on the management of more strategic spend categories.
Learn just how much you could save by rethinking your current office supplies program this year, and how partnering with a GPO fits in with a comprehensive spend management strategy, by downloading our "3 Reasons to Rethink Your Office Supplies Program" infographic.