Unlocking Value

The purchasing profession has been treated as an afterthought in organisations for far too long. In many businesses, the secret to lower costs, improved profits and a more competitive operation lies in the supply chain. These days, organizations are taking a fresh look at how they purchase products and services.

More and more companies are transforming their procurement functions to achieve breakthrough results and unlock the added value in the supply chain. They recognize that sourcing and procurement should be making more of a contribution to bottom line profits and delivering competitive advantage. As market and cost pressures grow, Terrace is helping organisations to realise the power of sourcing and procurement by delivering transformation in a way that goes beyond the traditional tactical and leverage approach in procurement and supply.

Leveraged properly, the strategic management of the organization purse strings can result in significant leveraged cost savings and productivity improvement. The return on investment can be immediate and is dramatic.

Research has shown that companies with well-managed, innovative, relationship-focused procurement practices outperform other companies in both financial and productivity terms. The reason is simple:

• Purchases of outside goods and services can consume as much as 60% or more of a business' revenues.

• Just 50% to as little as 15% of these expenses are closely managed in many companies.

• A mere 10% reduction in outside purchasing can increase profitability from 20%-60%.