Hard Dollar Supply Chain Cost Savings – Myth or Reality?

In this contributed article, Adam Cummins, principal, discusses how supply chain and procurement organizations can overcome the challenge of demonstrating hard value for their initiatives. Sample excerpt: “Supply Chain and Strategic Procurement organizations across all industries are constantly asked to drive value for their parent companies. Such value can manifest in many different ways, including actual cost reductions, value from streamlining critical purchasing or supplier management processes as well as in some cases, even revenue generation. However, the ability to effectively capture and measure the “hard dollar” effect of these cost savings is a perpetual challenge. This is generally due to problems defining an appropriate baseline, forecasting of future demand, ensuring actual purchasing compliance against negotiated rates and contracts, as well as situations pulling budget dollars away from P&L owners. The combination of these challenges makes what should be a simple task a very difficult problem to overcome.”

HfS Business Transformation Center