Inside Supply Management Magazine

May / June 2020

The Traditional Mindset of Cost Savings Is Dead

May 01, 2020
By Hemant Porwal, CPSM

Even today, 90 percent of procurement teams measure effectiveness by pure-play cost savings, which for a product or service is traditionally calculated as old price minus new price, multiplied by the volume. Over time, the concept of measuring savings has evolved to creating a baseline by comparing items under the form, fit and function framework.


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