Chief procurement officers (CPOs) should take a number of steps to cope with the current economic environment, according to a panel of financial and procurement experts. Here are five actions recommended by the group: 1. Get quick visibility into spending. Companies can't control what they can't see. In most cases, spend-visibility updates should be done on a quarterly basis at a minimum. 2. Take steps to mitigate the impact of inflation. The panel suggested renegotiating contracts with target suppliers, and sourcing with an eye toward deriving higher value from supplier relationships. 3. Renegotiate and enforce compliance to contracts. Contract compliance becomes even more critical in a recessionary environment. 4. Mitigate risks when pursuing cost reductions. One of the biggest mistakes companies make is focusing exclusively on cost, rather than evaluating overall value with suppliers. 5. Do more with less. The smart application of information technology can help companies become more efficient. In addition, the group said, companies should consider using outside consultants and services to help them achieve successful sourcing programs against a backdrop of rising fuel prices. The panel was sponsored by Emptoris, a vendor of contract management software.
Enjoy curated articles directly to your inbox.