Group Purchasing Organizations (GPO)
What sort of leverage could you create by combining your spend in target indirect categories with 500 other companies? And what if you could achieve world-class category management and get unique category management technology at no cost? You can with the Insight Sourcing Group Group Purchasing Organization (GPO) programs.
The concept of a GPO makes lots of sense. But as sourcing professionals, we have learned the hard way that not every indirect category is a fit. Volume and economies of scale are not the only determinants of price. Wildly differing cost-to-serve variables means trying to force-fit a GPO model in some categories yields programs that may either be highly restrictive and a poor fit for many, or do not provide savings relative to a custom-designed program. Therefore, we have a highly targeted set of group purchasing offerings.
Insight Sourcing Group’s GPO programs are a quick and easy solution for our clients to realize rapid or additional savings. Group purchasing programs leverage aggregate pricing in volume-driven categories so that you get the best possible service levels and pricing with leading suppliers.
The Insight Sourcing Group GPO programs are unique in the marketplace for four reasons:
- Our programs are developed by hard-core sourcing professionals. Most other GPO programs in the market are developed by former sales people from the indirect world or by hospital administrators. Those programs often degrade over time as suppliers chip away at gaps in the contracts to improve their own margins. These groups are often guilty of GPO “overreach” and offer programs in categories that are just not a great fit for aggregated, one-size-fits-all programs.
- Our GPO members receive SpendHQ’s Category Management module for free. These unique category-specific tools enable your procurement team to manage the category at a world-class level in a matter of minutes a month. They have full visibility to line-item detail and can spot and reverse negative demand patterns, eliminate waste, detect fraud, and track savings at an auditable level.
- We provide active management. We provide recommendations for additional savings and spend several thousand hours a year on vendor management to ensure our suppliers fulfill their commitments.
- If our out-of-the-box program is not a fit, we can customize it or even pivot to a full strategic sourcing process. No other GPO offers that flexibility or capability.
There are no fees to join our group purchasing programs as we receive a rebate from the vendors based on the total spend in our program. We have partnered with industry-leading suppliers to bring you world-class services and pricing in the following categories:
How to Get Started
The implementation process for our GPO programs is quick and straightforward, requiring very minimal effort on your part.
- Opportunity Assessment
- We execute a confidentiality agreement
- We then perform data collection and a current state assessment
- Value Delivery
- You make the decision to join the program
- We then onboard the supplier and implement Category Management
“Once we saw the significant savings the office supplies GPO helped us achieve, we immediately extended the program globally.”
Manager, Global Sourcing
CGI Group Inc.
GPO PROJECTS SNAPSHOT
- $6B client joins Auto Rental GPO and saves $500k+ over the life of the contract
- $3B retailer joined Office Supplies GPO and saves 18% across the category
- Leading insurer utilizes the Office Equipment GPO during its expansion to supply 60+ locations
- $1B MRO GPO client sees initial 10% savings, then an additional 7% savings by optimizing its core list
NEW WHITE PAPER
Why GPOs Sometimes Fail: Strategies to Maximize the Power of Your Group Purchasing Program
Group Purchasing Organizations (GPO) have been around for some time, but the past 10 years have seen a significant rise in GPO popularity with respect to commercial application. The core premise has remained the same: consolidate the spend in a single category, negotiate agreements that reflect that aggregated spend, and create pricing and terms that no single company could achieve on its own.
This paper explores the history of GPOs, challenges for the current environment, how to avoid GPO overreach, and what you should look for when choosing a group purchasing solution provider.
“CGI joined Insight Sourcing Group’s Office Supplies GPO in 2011, which initially covered only our North American locations. Once we saw the significant savings the program helped us achieve—and how we were able to monitor the savings and communicate the results to other business units—we extended the program globally to include our locations in Europe and other parts of the world. The program’s robust contracted pricing list helps us further maximize savings.”
Manager, Global Sourcing
CGI Group Inc.