The relationship between businesses and suppliers is hanging in the balance as cost-cutting options narrow, according to a new piece of research released by Basware and Mark Frohlich, associate professor of operations management at the Kelley School of Business, Indiana University.
The Cost of Control: The Real Price of Cost Cutting reports that chief financial officers (CFOs) and chief procurement officers (CPOs) of large organizations continue to apply existing approaches in cost control to tackle the ongoing demands of a tough economic climate.
Authors of the report say a new approach is called for and recommend that CFOs and CPOs share each department's expertise to find a way forward; that they push levels of spend visibility, cost transparency and general openness to unprecedented levels in order to unleash significant new areas of cost savings; and that they develop integrated and collaborative relationships with first- and second-tier suppliers to better evaluate and control risk in the supply chain.
