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Increased Vendor Loyalty =Decrease Leverage

Organizational Barriers

• Risk Taking/innovation is not rewarded
• Corporate structure causes fragmented purchasing
• Business Units pursue independent paths

Informational Inadequacies

• No awareness of much is spent enterprise wide on a category or with a supplier
• Multiple, fragmented sources of information
• Lack of knowledge about new or alternate vendors
• Basis of pricing may not be apparent

Inefficiencies in Monitoring and Tracking

• Need for improved accounts payable practices
• Non- negotiated extras added on to invoices
• Initial purchase order rarely compared to final invoice
• Need to consolidate systems

Entrenched Behavior

• Buyers restricts themselves to familiar vendors
• Suppliers in comfortable, cordial relationships
• Incremental, not zero-based, buying is typical
• Ad hoc and informal purchasing is an accepted practice

Internal routines that develop over time can hide savings opportunities. A comprehensive examination of all transactions will identify opportunities for recovery. The above points illustrate the need for reviews of key spend areas for any size business. At worst, you will receive a no cost, independent 3rd party verification that all contracts, processes, etc are up to date

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