Executive Briefings

Should Your Logistics Spend Be Under Central Purchasing Organization?

The more complicated a spend area is, the more likely it is to go unmanaged and unleveraged. And historically, the logistics spend category may have been a prime example. But in today's era of cost-conscious, global supply chains more companies are centralizing the management of the logistics spend under a global logistics purchasing organization to reduce redundancies and identify optimization and cost savings opportunities.

Without a well thought-out organizational chart in place, managing any global spend will not be effective. While effective organization models will vary based on the industry and the company's individual goals, there needs to be some long-term thought put into who manages the logistics spend and how other organizations will interact with the responsible organization.

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The more complicated a spend area is, the more likely it is to go unmanaged and unleveraged. And historically, the logistics spend category may have been a prime example. But in today's era of cost-conscious, global supply chains more companies are centralizing the management of the logistics spend under a global logistics purchasing organization to reduce redundancies and identify optimization and cost savings opportunities.

Without a well thought-out organizational chart in place, managing any global spend will not be effective. While effective organization models will vary based on the industry and the company's individual goals, there needs to be some long-term thought put into who manages the logistics spend and how other organizations will interact with the responsible organization.

Read Full Article