Large enterprises commonly focus on using their size to drive price reductions when purchasing consumable materials. This practice has been successful but is reaching the point of diminishing returns. Years ago, companies could generate savings by running bids, reverse auctions, and other price reduction techniques designed to generate more competition. The research shows that the average amount of savings from a sourcing event now totals less than 4% and that amount is trending down. Ouch! If you really want to drive savings, you have to find a lever you can pull other than price.

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