Corporate Boardroom Series: Reducing Supplier Relationship Costs with Progressive Supplier Reduction

The monthly Corporate Boardroom Series explores current business challenges, helping C-level executives prepare for the next “hard question” their boards of directors are likely to ask. Each brief focuses on a single question, provides Celent's view of the issues behind the question, and defines specific action steps that will position the company to deliver an effective response.

The third installment of this series focuses on providing practical guidance to corporate and bank buyers, who are faced with the challenge of minimizing the administrative costs to manage their suppliers and, at the same time, improving their payables without putting business relationships at risk.

“Current corporate attention is to ensure business continuity with key suppliers. Administrative costs and a lack of historic information about entrant suppliers’ performance make it harder to improve working capital ratios,” says Enrico Camerinelli, senior analyst with Celent's Corporate research group and author of the report. “New practices to manage supplier relationships are available to corporate executives; progressive supplier reduction is the most noteworthy one.”