Most dealerships have too many suppliers (40 percent more suppliers than are needed) Most dealerships are paying suppliers 25 percent more than they should (ref: Aberdeen purchasing research and SSI results) TYPICAL DEALERSHIP APPROACH TO SPEND MANAGEMENT OR PURCHASING Most dealers and groups execute their spend management strategy in a decentralized environment. This means that a lot of managers are expected to continually shop suppliers for the "best price" and bring that back to the dealership. Decentralized purchasing environments are characterized by the following: Limited executive involvement - trusting that management is incented to "buy profitably" No formal purchasing or spend management structure (vision, staff, policies, processes) Limited expense category scope (few categories rather than all categories) No written objectives-or if so-objectives that are not measurable or quantifiable No methodical sourcing plan to attack all high value expense categories No understanding of annual or multi-year spend and leverage potential with suppliers Limited staff expertise - shopping for the best price and running a thorough and comprehensive quote (RFQ) are not the same Continued on pg. 22 D I G I TA L D E A L E R . C O M SEPTEMBER 2019 21https://www.mymanheim.com/express/ https://www.mymanheim.com/express/ http://www.DIGITALDEALER.COM