Unless your Procurement team has adequate resources, it can be difficult or impossible to accurately gauge supplier performance. According to the 2018 CPO Survey from consulting firm Deloitte, 65% of Procurement leaders have limited or no visibility of suppliers beyond their Tier 1 vendors.
With little capability to monitor and gauge supplier performance, a lack of supply chain transparency introduces potential costs, complexity, and significant risks to an organization.
Working with an indirect spend GPO alleviates the necessity for having to gauge supplier performance for those included within the GPO. That’s because the GPO vendor monitors and maintains the supplier relationships within the offering, handling ongoing certification, verification, and contract terms.