The Strategic Profit Model

By Joseph L. Cavinato Ph.D., C.P.M
Senior Vice President and ISM Distinguished Professor of Supply Chain Management

A flinty-eyed, seasoned buyer recently told us, "It was easy when all we had to think about was price." He continued, "But, today, senior management wants even more from us. The old days were simpler." A parable, perhaps, but it drives home the point that purchasing today is more than just price. Purchasing and supply creates several financial impacts upon the organization. In some ways it requires a delicate balancing act of many financial elements. Luckily, most can be boiled down to a simple tool - the strategic profit model.

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