Procurement teams are under more pressure than ever in today’s volatile economic climate. Rising costs, shrinking resources, and time-consuming processes are making it harder to maintain efficiency and profitability.
So how can businesses adapt? One proven solution is partnering with Group Purchasing Organizations (GPOs), which leverage the combined buying power of multiple companies to secure better supplier terms, reduce costs, and improve efficiency.
In this article, we’ll dive into the challenges procurement teams are facing and how GPOs like CoreTrust provide practical strategies to navigate these hurdles.
Challenge #1: Rising Costs Are Impacting Profit Margins
The Problem
Rising shipping costs, increasing labor expenses, and economic uncertainty put additional pressure on procurement teams already working with tight budgets. According to Deloitte, shipping costs skyrocketed by over 77% between 2021 and 2022, creating a significant burden for businesses. At the same time, these teams are tasked with maintaining quality, meeting deadlines, and ensuring operational efficiency, all while staying within tight financial constraints.
How GPOs Can Help
GPOs like CoreTrust empower organizations to control costs more efficiently by harnessing the power of collective purchasing. Members gain access to pre-negotiated agreements with top suppliers across a broad range of indirect spend categories. Many contracts feature fixed pricing, helping to mitigate economic uncertainty while delivering measurable savings that positively impact the bottom line.
The Impact
CoreTrust members save an average of 20% on indirect spend, showing that significant cost reductions are possible even in tough markets.
Challenge #2: Increased Demands, Limited Resources
The Problem
Procurement teams are often tasked with achieving greater results while working with fewer resources, creating constant pressure to do more with less. Balancing the demands of daily operations, such as managing supplier relationships and ensuring timely deliveries, with longer-term strategic goals like driving sustainability initiatives or fostering innovation can leave teams feeling stretched thin.
How GPOs Can Help
GPOs act as an extension of procurement teams, taking on responsibilities such as vendor management and contract negotiations. CoreTrust offers pre-negotiated contracts and personalized spend analyses, reducing the workload for in-house teams. This allows procurement staff to focus on strategic initiatives instead of operational bottlenecks.
The Impact
By partnering with a GPO, procurement teams can achieve better cost savings, improve efficiency, and deliver on strategic priorities like sustainability and innovation. With less time spent on day-to-day tasks, teams can shift their focus to driving long-term value for their organizations, resulting in stronger overall performance and growth.
Challenge #3: Time-Intensive RFP Processes
The Problem
Requests for Proposals (RFPs) are crucial for businesses procuring goods or services, but they can be time-consuming. The process involves drafting detailed documents, soliciting vendor bids, reviewing and comparing them to meet business needs, and navigating lengthy contract negotiations. This extensive process can demand significant time, effort, and resources, especially for organizations managing multiple RFPs simultaneously.
How GPOs Can Help
GPOs like CoreTrust simplify procurement by handling the heavy lifting and granting members immediate access to pre-negotiated contracts. With access to over 125 carefully vetted agreements, CoreTrust eliminates the need for lengthy RFP processes. This means procurement teams can focus their time and energy on more strategic, high-value tasks like driving innovation and planning for the future.
The Impact
Reducing time spent on RFPs allows organizations to make faster decisions and work more efficiently. Teams can focus on strategic goals, leading to better resource use, lower costs, and greater flexibility to meet market demands.
Challenge #4: Limited Negotiation Power for Small Teams
The Problem
Small and mid-sized businesses often struggle to secure favorable terms with suppliers due to limited bargaining power, unlike larger corporations. This can lead to higher costs, lower-quality products, and limited access to premium options. These challenges stretch tight budgets, making it hard for smaller businesses to stay competitive. Without effective negotiation, many face barriers to growth and sustainability, leaving them at a disadvantage.
How GPOs Can Help
GPOs like CoreTrust level the playing field by giving businesses of all sizes access to $7 billion in annual purchasing power. From private equity firm's portfolio companies to national accounts, members gain the same premium pricing advantages and favorable terms typically reserved for large Fortune 500 companies.
The Impact
Members access best-in-class pricing and terms from industry-leading suppliers, including Staples, FedEx, Dell, and Amex GBT, which strengthen their bottom line and fuel sustainable growth.
Added Value from Data-Driven Insights
GPOs offer more than just cost savings and operational efficiency—they provide valuable tools and insights tailored to meet the unique needs of their members. For example, CoreTrust members have free access to the CoreTrust Experience Platform (CXP), an advanced AI-powered solution that delivers detailed spend analysis and projected spend, all in one place. This platform helps members gain a deeper understanding of their purchasing patterns and uncover new opportunities for savings.
Why CoreTrust is the Right Partner
In today’s unpredictable market, procurement professionals need innovative solutions to tackle rising costs, limited resources, and inefficiencies. CoreTrust is more than a GPO—we're your partner in driving growth and profitability. With benefits like significant cost savings, simplified processes, and free membership, CoreTrust empowers organizations of all sizes to streamline procurement and unlock new opportunities.
Ready to turn today’s challenges into tomorrow’s success?