Getting the Most Value Out of Your Indirect Spend Categories
Unleash savings and value.
A playbook for understanding the significance of indirect spend, the challenges it presents, and how to successfully unlock its value.
Introduction
Imagine a bustling manufacturing plant. Employees are at their most efficient, machines are operating smoothly, and products are being assembled on the line.
Indirect spend encompasses all the goods and services that keep the machinery and operations running smoothly.
It includes everything from office supplies and IT services to logistics and utilities - all necessities even though they don’t directly contribute to the final product. While these items and services may not be the focus of attention, they play a critical role in ensuring that the entire operation functions effectively.
This playbook aims to help you understand the significance of indirect spend, the challenges it presents, and how you can unlock the value hidden within these categories.
We’ll also cover how to navigate this landscape successfully, particularly through the powerful resource of a group purchasing organization (GPO) like Una.
Inside you'll find:
- Five challenges of managing indirect spend (+ solutions)
- Six strategies for reducing maverick spend
- Six mistakes to avoid when it comes to these categories
- Five ways to successfully manage your indirect spend
- Tips for working with a GPO to increase savings and reduce risk
- Case study: how a real Una member saved an average of 27% across indirect spend categories
Download a free copy today.
Cut Costs & Reduce Risks
Did you know that indirect spend typically accounts for 15% to 30% of an organization’s total expenditure?
McKinsey found that tackling indirect spend can reduce overall costs by 10% to 25% and reduce the manual effort involved in supplier governance by 30% to 50%.
If you’re not paying attention to this category, you might be leaving money on the table.
Not managing your indirect spend effectively also means you could be opening your organization up to risk. While your direct suppliers undergo thorough checks and balances, indirect suppliers often slip through the cracks.
Beyond cutting costs and limiting risks, better managing indirect spend is about fostering a culture of strategic procurement that supports the overall growth and health of your organization.
Case Study
Saving 27% Across Multiple Indirect Spend Categories With Una
As a network of facilities consisting of both detox and inpatient rehabilitation centers, this valued member was growing while inflation soared and supply chain disruptions loomed overhead.
Without any mature procurement policies in place, however, spend was going unmanaged in several categories. They needed help managing this indirect spend and delivering cost savings quickly.
Una’s robust supplier portfolio proved to be a valuable asset, allowing our team of Sourcing Advisors to connect the member to double-digit savings via multiple contracts right away.
By bringing in a group purchasing organization to help support their procurement strategy, they were able to analyze spend quickly, secure discounted pricing, and streamline their purchasing within a matter of weeks.
Case Study Results
49%
Savings on Office Products
22%
Savings on Food Costs
20%
Savings on Staff Uniforms
20%
Savings on JanSan/MRO
By recognizing the importance of indirect procurement and implementing effective strategies - particularly through a partnership with a GPO like Una - you, too, can unlock significant value, reduce costs, and mitigate risks.
Effective indirect procurement strategies can have a significant impact on an organization’s bottom line as it represents an ever-growing portion of its overall spend.
Your organization could be our next success story. Download a full copy of this playbook and start maximizing the value within your indirect spend categories.