Bigger isn’t better when it comes to a supplier base.
That’s the conclusion businesses are coming to.
More businesses are rationalizing and consolidating their supplier base to gain a competitive advantage through reduced costs, more collaborative supplier relationships and less risk of supply chain disruption. These are some of the reasons that top-performing procurement organizations have 18 percent lower operating costs and 28 percent fewer full-time equivalent than their peers, per The Hackett Group. In some cases, businesses are settling on a single supplier for certain commodities.