A GPO optimizes indirect spend management by unlocking greater purchasing savings potential while enhancing the efficiency of procurement professionals in your organization. Because the GPO handles strategic sourcing, manages supplier relationships, and maintains supplier contracts, it eliminates many of the challenges of getting indirect spend under management and mitigates third-party risk at the same time.
According to ProcureCon, indirect spend comprises 40% of total procurement spend at 40% of companies in the US. For larger businesses that have multiple locations, decentralized purchasing and a lack of oversight can lead to overspending, duplicate or unnecessary purchases, and non-compliance. By handling that indirect spend through a GPO – or at least a percentage of it – you can achieve a much higher level of indirect spend control and realized savings.