Innovation at odds with Procurement?

harvard-business-review-ipad-digital-magazine-229x300We recently ran across an article in the Harvard Business Review blog written by Michael Schrage entitled, “Procurement’s Best Priced Deal May Stifle Innovation“. The provocatively titled piece makes an interesting point about the alleged conflict between Procurement’s focus on lowering prices, and the business unit leaders, product managers, and marketers desire for more innovation from their suppliers.

The author claims that seeking out innovative solutions is rarely viewed as a priority by Procurement, who sees their role limited to choosing vendors based on price. Schrage makes the interesting point that in certain cases innovation itself can provide organizations with a greater cost efficiency that simply identifying the cheapest among the standard contenders.

We believe that corporate trade is one such innovation that can add millions of dollars to the bottom line of organizations willing to look at an alternative method of achieving real cost savings. We’ve frequently made the point here that there are only so many tools available to most procurement professionals to achieve greater savings in the direct and indirect goods and services purchased by their organization. You’ve squeezed what you can from price negotiation. Now what? For those organizations who have never taken advantage of corporate trade, this an innovative financial solution that can provide substantial cost savings for virtually any good or service sourced by the organization.

To learn more, download and read our paper entitled, Savings Beyond Price Negotiation.

 

About Mike Lake

Mike is the Senior Vice President of Marketing for Evergreen Trading. When not playing jazz trombone he is probably obsessing about writing content that will capture the attention and interest of business people and fellow learning junkies everywhere.

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