Most midsize enterprises lack disciplined sourcing practices, category expertise and spending power to negotiate and maintain competitive supply chains, according to a new AberdeenGroup benchmark report, "Strategic Sourcing in the Mid-Market Benchmark: The Echo Boom in Supply Management." Aberdeen estimates that such deficiencies are costing midsize U.S. firms $134 billion a year in missed supply savings opportunities.
Aberdeen's benchmark of 133 procurement and supply chain executives found that continued pressures to reduce costs and improve spending visibility and control have made strategic sourcing improvements a priority for most mid-size enterprises.
According to the study, more than half of mid-size companies have either launched initiatives to formalize and improve strategic sourcing capabilities within the past year or will do so within the next year.
Aberdeen recommends the following practices to formalize and improve strategic sourcing:
- Develop and enforce standard sourcing procedures company-wide;
- Hire sourcing and commodity expertise, including consultants;
- Improve access to and quality and analysis of corporate spending;
- Enlist executive support for resources and policy changes; and
- Leverage commercial sourcing management automation.
This report benchmarks strategic sourcing processes, competencies, and systems infrastructures of midsize enterprises. It identifies the practices and attributes of top-performing sourcing programs and provides a framework for estimating the operational and financial impacts of adopting such practices.
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