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Efficient Procurement Operations Optimize Supply Chain Savings

Published: Tuesday, June 15, 2004 - 22:00

Top companies depend on savvy purchasing techniques to increase supply chain performance measurements, according to research by benchmarking and consulting firm Best Practices LLC.

Supply chain research, drawn from executive interviews and surveys of more than 100 top-performing companies, includes these findings:

  • Top-performing procurement departments run their organizations with fewer than one official for every 1,000 total company employees. Lean organizations demonstrate superior on-time delivery, lead time and other supply chain performance measures--indicating steamlined and automated systems which eliminate department waste, lower costs and deliver outstanding customer service.
  • Top-performing procurement departments support the realization of more than $150 million in revenue per procurement employee. Coupled with minimized supply chain costs, these organizations are having a profound impact on corporate profitability and shareholder value.
  • Profiled companies claim purchasing savings of up to 25 percent in retail and nondiscounted prices through diligent negotiation (not including volume discounts or similar reductions offered to each customer).

"Optimized supply chain systems allow procurement professionals to focus on rooting out costs at every opportunity," says Chris James, vice president at Best Practices LLC. "Commodity, inventory and distribution management are constantly under pressure to realize ever-increasing gains for the organization."

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