The supply chain disruption has been affecting all industries over the last couple of years. This, in turn, causing purchasing and sourcing professionals to adjust and pivot in order to continue operating. Now, you may be asking yourself, “will the supply chain ever be the same?” The most common answer—probably not. Those responsible for purchasing and sourcing suppliers are adapting and continuing to learn how to best function in the “new supply chain.” Part of this new normal includes ensuring continuity of supply and mitigating risk while concentrating on cost savings in a market where all prices are rising.
As industry leaders work through these new challenges presented to purchasing and sourcing strategies, many are turning to group purchasing organizations (GPOs) for a more guaranteed supply and better buying power. A GPO can give you access to some of the products that are difficult to get your hands on while walking you through the new supply chain with deeper discounts, preferred terms and conditions, and strong supplier relationships.
Keep reading to learn how a GPO can help you navigate the current state of the supply chain.
The New Supply Chain
As you adapt to the current volatile conditions, you’ll likely still see fluctuating lead times, with some resources almost doubled. Transportation and shipping costs are still on the rise, and with the current inflation, we're experiencing dramatic increases in the cost of everything we need for day-to-day life and business, from gas to groceries and beyond. The labor shortage continues to magnify the supply chain disruptions as companies are having trouble finding workers to staff their properties and keep operations running efficiently.
Organizations across all industries are working to re-evaluate their strategy and futureproof their supply chain. Through group purchasing, your business can overcome these challenges with the unique benefits of a GPO. Below we’ve outlined the next steps your company can take with its GPO partner.
Next Steps for Your Organization
- Monitor rising inflation with your GPO. All GPO contracts have reduced volatility with contracted pricing to help your organization's budget stay on track.
- Master spend and category management with the help of a GPO while strengthening your defense. Your GPO can oversee complex or undermanaged categories while your procurement team focuses on areas of spend that add value to your organization. Through improved spend management, your GPO works to reduce tail spend and eliminate maverick/rogue spending, saving you time and money.
- Strengthen your supplier relationships to ensure your organization is prioritized when situations arise. Having a GPO in your strategy automatically sets you up for supplier success and provides you with immediate access to pre-vetted contracts with longstanding relationships.
- Manage your organization's risk across all of your suppliers. Adding a GPO to your strategy is a key way to accomplish that. Your GPO will constantly be monitoring and mitigating risk across its portfolio of suppliers.
- Gain market and industry insight from your GPO. We have subject matter experts that act as members of your team available to answer any questions on a diverse set of spend categories, including Facilities, MRO, Corporate Services & HR. These resources will keep you up-to-date on the latest trends and help you strengthen your purchasing strategy.
GPO Strategy for Supply Chain Management
Overcoming the challenges of the supply chain and moving forward will require some creativity. You can outsource some of your labor and utilize group purchasing organization contracts to save your organization time, money and resources. Your purchasing team can only do so much, and there may be spend categories you can’t focus on as deeply or aren’t as high priority. Your GPO can give proper attention to those categories while providing discounted contracts.
Group purchasing helps your organization remain resilient. The combined spend of member companies increases buying power to provide GPO members with optimal prices and terms on all contracts.
Start leveraging the partnership today!