Dash-for-cash: The short term tactic that will do more harm than good
By John Newton, Product Management Director, State of Flux
During recent times, supply chains and supplier relationships have been tested like never before, putting the Chief Procurement Officer centre-stage and in the spotlight to find solutions as businesses try to protect operations, revenue and profitability. Throughout the Covid-19 crisis we’ve seen many procurement teams adopt a so-called “dash for cash” response (i.e. a classic cost-out initiative) - whilst not a surprising response to a crisis it’s a very short term in focus and easy to do. There are many levers available for such an approach (control demand, change the specification, limit usage, aggregate spend and so on). Yes, cost-out has the potential to yield results quickly and it will help the bottom line but it can do a lot of damage at the same time - the kind of damage that is difficult to undo.
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