I hope that you have enjoyed the article “Cost Savings: From Potential To Actual.”

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In my years in the field, I’ve definitely seen an evolution of purchasing-driven cost savings. Cost savings are often recorded when a contract is signed and, as such, are only estimates. The evolution has followed this path:

1. Purchasing department doesn’t achieve cost savings

2. Purchasing department implements a contract poised to produce cost savings, management is surprised, but nothing is formally recorded

3. Purchasing department implements a contract poised to produce cost savings and records cost savings, but definitions of cost savings are not formal or defensible

4. Purchasing department implements a contract poised to produce cost savings and tries to apply strict standards to the recording thereof

5. Purchasing department implements a contract poised to produce cost savings, applies strict standards to the recording thereof, and compares estimated cost savings with actual cost savings at the end of a period

6. Purchasing department implements a contract poised to produce cost savings, applies strict standards to the recording thereof, and tracks the actual vs. estimated cost savings often throughout the life of the contract

7. Purchasing department implements a contract poised to produce cost savings, applies strict standards to the recording thereof, tracks the actual vs. estimated cost savings often throughout the life of the contract, and takes all actions necessary to ensure that actual cost savings equal estimated cost savings.

This article and the accompanying podcast, featuring Paladin Associates’ VP Barbara Ardell, provide strategies to enable you to reach this latest stage in the cost savings evolution. The profession needs you get there!

To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
http://www.NextLevelPurchasing.com

Charles Dominick, SPSM, SPSM2, SPSM3

Charles Dominick, SPSM, SPSM2, SPSM3 is an internationally-recognized business expert, legendary procurement thought leader, award-winning entrepreneur, and provocative blogger. Charles founded the Next Level Purchasing Association in 2000, oversaw its incredible growth, and successfully led the organization to its acquisition by the Certitrek Group in 2016. He continues to blog and provide advisory services for the NLPA on a part-time basis as he incubates his upcoming business innovations. Charles is also the co-author of the wildly popular, groundbreaking book, "The Procurement Game Plan: Winning Strategies & Techniques For Supply Management Professionals."

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