Blog October 10th, 2024 Cost pressure in procurement

Thomas Teichmann

A topic that affects not only large enterprises but especially small and medium-sized businesses.

In times of rising costs and tight budgets, it is more important than ever for companies to identify and leverage savings potential in procurement.

An effective method for curbing cost drivers is the use of Procurement Analytics. With this data-driven approach, procurement departments can gain valuable insights and make informed decisions.

Here are 5 key points on how Procurement Analytics can help reduce cost pressures:

🔍 Identification of Cost Drivers
Procurement Analytics helps make expenditures transparent and identify hidden cost drivers, e.g., through the analysis of suppliers, material groups, items, and general ledger accounts.

📊 Consolidation of Expenditures
By analyzing purchasing volumes, companies can consolidate similar orders to take advantage of economies of scale and negotiate better terms with suppliers.

💡 Supplier Optimization
Procurement Analytics reveals which suppliers are causing disproportionately high costs. This allows for strategic selection and, if necessary, renegotiation of contracts.

🔄 Supply Chain Optimization
By analyzing the entire supply chain, bottlenecks or inefficient processes can be uncovered. This not only reduces costs but also improves the speed and reliability of deliveries.

📉 Risk and Compliance Management
Procurement Analytics helps minimize risks and ensure compliance with procurement policies, preventing unnecessary expenses and promoting cost savings.
With the right tools and data, procurement can play a key role in reducing cost pressures. Are you already using Procurement Analytics in your company?

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