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1、Industrials&Electronics PracticeHow medium-size enterprises can better manage sourcing Small and medium-size enterprises often struggle to find procurement cost savings.Yet there are ways to do it while still pursuing growth and providing a superior customer experience.September 2023by Deepanshu Cha

2、wla,Ryan Fletcher,and Stijn Tollens CHUNYIP WONGHow medium-size enterprises can better manage sourcingIt is an age-old question that has confounded companies big and small:how can we reduce external spending without harming supply chains or sacrificing the quality of our products and services?The qu

3、estion becomes more relevant in times of economic uncertainty and high inflation as large companies take drastic cost-cutting measures such as reducing office space or scaling back on investments.1 While large companies can usually drive procurement cost savings with relative ease,small and medium-s

4、ize enterprises(SMEs)typically lack the necessary scale despite being the backbone of many economies around the world(see sidebar“The critical role of SMEs”).When it comes to procurement,SMEs often do not have the same purchasing power with suppliers that larger companies do because SMEs lack scale

5、and often have a single source of supply,rendering them unable to seek pricing that is more competitive.Moreover,SMEs sometimes lack focus or the wherewithal required to rein in spendingand when they do,value capture is often slow,prone to stagnation,and mostly ad hoc,resulting in incomplete,subopti

6、mal,or even unintended outcomes.So what factors prevent SMEs from undertaking a procurement transformation that goes beyond spending cutsone that helps simplify,realign,and strengthen the organization to help it grow and provide a better customer experience?Is there an approach or framework that SME