When supply cost pressures increase, so does the opportunity to gain an important source of untapped margin. By taking a more comprehensive approach to what they buy and how they buy it, companies can free up cash and refocus resources to fund strategic priorities without the pain of layoffs. A comprehensive approach means deploying a broader set of tools to better negotiate prices or becoming more efficient at using supplies. It also means getting full organizational alignment—ensuring that roles, decision rights and incentives all work toward the goal of lowering procurement costs.
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