How GPOs Can Help Improve Procurement Compliance
By Hugo Britt | February 3, 2022
For many organizations, partnering with a group purchasing organization (GPO) isn’t just about accessing volume discounts.
GPO contracts are also valuable because of the confidence they bring in terms of regulatory and contractual compliance for suppliers, while reducing maverick spend amongst internal stakeholders.
Improving supplier compliance
Procurement compliance can start on the supply-side, ensuring you’re working with quality suppliers that align with your organization’s internal goals and values.
Partnering with a GPO can help guarantee the suppliers you work with fit the bill.
Supplier evaluation takes time and effort, which is why many organizations may be tempted to cut corners when they need a product or service in a hurry. This puts the organization at risk of engaging a supplier that fails to comply with relevant guidelines, laws, policies, and regulations in your sector.
Leading GPOs use stringent methods to audit and investigate potential partners before signing any agreements. GPO members can be sure that due diligence has been performed and all suppliers have been thoroughly vetted.
Contracts in place with non-compliance clauses
Strong relationships with suppliers
Establishing, developing, and nurturing healthy, long-term relationships with suppliers promotes transparency between vendors, GPOs, and their members. This helps ensure timely delivery, customer satisfaction, good support, and can be extremely beneficial in times of supply chain disruption such as that experienced when COVID-19 first emerged.
Additionally, leading GPOs regularly review partnerships with suppliers to ensure members are getting the best-possible deal and identify any issues that could expose members to operational, reputational, or regulatory compliance risk.
Improving procurement compliance internally
GPOs can act as your organization’s purchasing arm, which is particularly useful in understaffed procurement teams. They can help drive purchasing compliance by providing explicit instructions to your buyers on how to utilize contracts.
Having a GPO relationship in place can help reduce maverick spend by removing the need for stakeholders to choose between suppliers. Having a single, consolidated supplier for office stationery, for example, will mean spend in this category isn’t scattered across dozens of unauthorized suppliers.
Benefits include reduced invoice processing time, a lower risk of fraud, fewer violations of existing contracts, cost reduction, and less time wasted on chasing maverick spend.
GPOs like Una also act as advisors, helping you streamline and close the gaps in your procurement process. Removing complexity will also aide in improving procurement compliance and reducing rogue spending.