Mid-Sized Companies Losing Money Due To Sourcing Deficiencies

Lack of disciplined sourcing strategies coupled with inadequate power to negotiate competitive supply chains is costing mid-sized enterprises $134 billion annually, according to a new study by AberdeenGroup. The study, "Strategic Sourcing in the Mid-Market Benchmark: The Echo Boom in Supply Management" surveyed 133 supply-chain executives.

"Mid-size enterprises missed out on the first wave of supply management automation and improvements," said Tim Minahan, Aberdeen's SVP, global supply research. "Continued pressures to reduce costs and compete in global markets have made strategic sourcing improvements for mid-size firms not just a priority, but a necessity for survival."

The study recommends taking the following steps to improve sourcing:

  • Develop and enforce standard sourcing procedures company-wide.
  • Leverage commercial sourcing management automation.
  • Improve access to and quality and analysis of corporate spending.
  • Enlist executive support for resources and policy changes.

"Mid-size enterprises that used these strategic sourcing techniques recorded more than four times greater procurement cost savings, better supply performance and greater profitability than industry peers," Minahan said.

For a copy of the report visit: http://www.aberdeen.com/summary/report/benchmark/RA_StratScgMM_TM_2501.asp

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