At the Smarter Commerce Global Summit, IBM (NYSE: IBM) today announced a study that says companies with high-performing procurement organizations are driving better bottom line results, according to an IBM study. These organizations report profit margins of 7.12 percent as compared to just 5.83 percent for companies with low-performing procurement organizations. Also, companies with top-performing procurement organizations report profit margins 15 percent higher than the average company - and 22 percent higher margins than companies with low-performing procurement organizations.
Companies plan to spend more in 2013 on a range of procurement-related technologies, but they are seeking a more strategic approach to doing so. So says a survey, "Corporate Spending and Procurement Trends - 2013", was conducted by Xchanging, a business process, procurement and technology services provider and integrator.
The way suppliers are typically segmented may work well for prioritizing procurement resources on supplier selection, managing supplier performance, and supporting and developing strategic suppliers. But it doesn't always work well for prioritizing resources on risk management and compliance. Many B and C suppliers may be easily switched, but still represent large material risks to the company (such as litigation or regulatory fines).
United Airlines is launching a Sustainable Supply Chain (SSC) initiative in an effort to better understand the environmental performance of its suppliers and deepen relationships with its key supply chain partners.