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Procurement Performance Optimization

Author(s):

Dr. Judith A. Stimson
Dr. Judith A. Stimson, Associate Partner, Accenture, Tampa Bay, FL 33647, 727/897-4539, judith.a.stimson@accenture.com

87th Annual International Conference Proceedings - 2002 - San Francisco, CA
Abstract

Companies that invest in performance management out perform other companies in multiple financial measures – total shareholder return, return on equity, return on assets, and cash flow return on investment, and multiple productivity measures – sales per employee, income per employee and real growth in sales. And, considering that a large percentage of Cost of Goods Sold (COGS) is purchased materials, Procurement can have a large impact. For example, for a company with 55% COGS in purchased materials, a 1% reduction in COGS delivers the same margin lift as 12-18% sales growth.

Procurement Performance Optimization — 46 KB (PDF)