A group purchasing organization, or GPO, is a collection of businesses or organizations that leverage their collective purchasing power to maximize the discounts available from vendors. Modern GPOs have evolved greatly, and today they not only deliver their members great prices but excellent service as well. Here are six of the ways that group purchasing organizations can help you save on procurement costs:
1. Price Accuracy
A group purchasing organization will help members make sure that their invoices are completely accurate. Through software tools that scan invoices, they can identify errors and correct them on the fly, which not only keeps procurement costs down but also reduces the amount of time that your accounting department has to spend going over invoices to make sure they are accurate.
2. Indsutry Specialists
Not only will a group purchasing organization provide you access to a wide range of equipment and supplies that are integral for running your facility, they also offer individual assistance from specialists that can work with members across different departments. This advice can be invaluable for getting your team members up to speed on new equipment that you have purchased, which can improve operating efficiency and your ROI on purchases.
3. Educational Resources
One of the most valuable benefits of joining a group purchasing organization is that you get access to high quality education from industry experts. These could include publications sponsored by the GPO, podcasts, and toolkits that can be used in the evaluation of your operation. You will also get updated information about the latest industry standards, making it easy for you to keep your business in compliance.
4. Cost Reduction Through Standardization
Keeping products consistent across your organization helps you lower costs and improve the fluidity of your operation. A good group purchasing organization will equip you with data that you need to find products that have similar design and applications. This data helps you find the least expensive solution that will still deliver the quality you require.
5. Expert Supply Chain Data Interpretation
GPOs don’t just combine their joint purchasing power; they also leverage the joint knowledge provided by the sum of the data from individual group members. Using this supply chain data, a group purchasing organization will create benchmarks for their members to use in evaluating the efficiency of their supply chain. Being able to maximize your supply chain value will allow you to deliver top-notch solutions to your audience while you maintain sufficient margins on your services.
6. Financial Management Solutions
The best GPOs will provide you with ways that you can improve your collection process so that you will be able to see an increase in profits and better predict what your cash flow will be like. A group purchasing organization will often have a dedicated department that exists to help members capture revenue, which further saves them money on procurement.
The benefits of joining a group purchasing organization is very helpful to your bottom line. Look into a GPO that suits your organization’s needs, so you can begin reaping these benefits immediately.