There are many benefits to outsourcing procurement and consolidating supplies. Large companies often outsource procurement to save money as a good procurement strategy can be the difference between a profitable company and a failed business.

It is also common in smaller companies who experience growth spurts. With fewer purchasing resources, both time and money can be saved by taking advantage of external structures and experience.

Companies that don’t have the expertise to find good suppliers or purchasing staff, or the market leverage to obtain good discounts are also turning to outsourcing procurement.

Some of the major benefits that can be gained are:

• Cost reduction in staff, training and space.
• Market leverage allowing for better discounts.
• Additional costs per purchase are lowered by economies of scale.
• Marketing knowledge of best product suppliers.
• Highly skilled and experienced staff that specialise in purchasing.
• People who understand the purchasing environment can provide better management information and purchasing analysis.
• Negotiation by an expert in the field for more efficiency and profit.
• Improved communication between purchasing experts and the company staff.