What is Total Cost of Ownership (TCO) and how does it pertain to group purchasing organizations (GPO)? Savings don't have to end after your initial purchase. 

It's that time of year again! I'm sure you're just as excited as we are to gather the family, watch the big game and eat until you go up a pant size. But until the table is set, check out some facts about Thanksgiving you may or may not have known. 

Mission: Assist member in the creation of centralized contracts for additional categories. 

A current CoVest member has already tackled some of the more straightforward categories in their path towards centralized procurement. Their next goal is to expand their indirect categories and drive compliance. 

It is no simple task to generate savings in a high SKU category. It is even more difficult to create savings that will last. The CoVest whitepaper, on high SKU count in indirect categories, will start you on your journey to optimize pricing. 

Leverage within a group purchasing organization (GPO) is meant to benefit all parties, but how exactly is it effecting the members? Members gain from GPO leverage and here's why: 

Last week, CoVest had its fourth annual member meeting. We were thrilled to host this years meeting in our hometown of Cleveland, Ohio. Other than treating our members to the wonders of Cleveland, the meeting covered a wide range of subjects, ranging from CoVest updates to new supplier advances.

As a verb, to leverage means to gain an advantage through the use of a tool. For example, you can more easily lift a heavy object with a lever than you can lift it unaided. That is what is happening in a group purchasing organization (GPO). A company, that uses a GPO as a tool, can be seen as part of a bigger organization and thus gain better pricings, service and terms than it could have on its own.

Mission: Build a new member's first company-wide category contract. 

The new member is moving from a facility level sourcing focus to a centralized category management approach. They are aiming to decrease the many suppliers they have for each sub-category. 

Many companies are failing to realize that significant cost savings are in sectors NOT directly related to sales and services. Indirect spend is commonly overlooked and that is where companies are missing opportunities to improve earnings.

Group Purchasing organizations (GPOs) may have gotten their popularity through healthcare. And GPOs may have a large hospital member base. But the fact is, GPOs aren't just for the healthcare industry anymore.