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Home » Top Enterprises Are Much More Efficient at Procurement than Typical Companies Are

Top Enterprises Are Much More Efficient at Procurement than Typical Companies Are

December 19, 2008
Global Logistics & Supply Chain Strategies

World-class organizations spend 22 percent less than typical companies on procurement operations that typical enterprises do, according to recent research from the Hackett Group. In its report, "2020 Vision: Delivering on the Evolving Value Proposition of Procurement," Hackett also found that top companies operate with 37 percent fewer staff than average companies. They also generate 129 percent higher spend cost savings, including reduction and avoidance while also delivering great stakeholder satisfaction and support for initiatives in sustainability, innovation, working capital improvement, and other areas.

At a typical Global 1,000 company (with annual revenue of $22bn and annual sourceable procurement spending of $8.9bn) this represents more than $16m in annual savings on procurement operations, 249 fewer procurement staff, and over $263m in additional annual spend cost savings.

The report contains Hackett's so-called Procurement Capability Model, which organizes best practices by capability rather than tying them strictly to business processes. The model is designed to help companies identify weaknesses, predict future staffing needs, prioritize investments in tools and technology, and establish better strategic alignment among all parts of the enterprise.

Visit www.thehackettgroup.com

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KEYWORDS Business Strategy Alignment Global Supply Chain Management Retail Sourcing/Procurement/SCM Technology
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