Procurement leaders are often expected to be experts in every category. There’s pressure to manage your company’s complex spend cube, reduce risk and cut down on costs, all with limited resources. While organizations are looking to increase savings, improve efficiencies in their supply chain and manage supplier risk, a group purchasing organization (GPO) can be a guide to accomplishing these goals and more. One key way to leverage your GPO to attain these goals is to put your indirect spend under a microscope and evaluate where you can streamline and strategize to reduce costs.
To fully understand indirect spend and how it impacts your organization's efficiency and bottom line, you first need to understand what factors into it. Indirect spend is the costs associated with purchasing goods or services that in the end don’t factor into the solution your organization provides. These are items such as office supplies, travel expenses, fulfillment orders, maintenance costs, food and beverage, etc. As you can see, indirect spend purchases are necessary items, meaning you cannot eliminate them all together. The key here is finding ways to lessen the cost of these items and overall reduce your bottom line.
Keep reading to dive into how to manage indirect spend and increase savings by taking control of maverick and rogue spending.