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The $4 million procurement gap

Wide variation in purchase order processing costs reveals how productivity, cycle time, and governance determine procurement performance at scale.

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A new analysis highlights a striking reality in procurement operations: the cost to process a purchase order can range from roughly $14 to more than $54, depending on the organization, creating a gap exceeding $4 million annually for companies processing 100,000 orders.

The difference isn’t driven by what companies buy, but by how procurement work gets done. Top-performing organizations achieve significantly higher productivity and faster cycle times, issuing purchase orders in as little as one day compared to 2.5 days for lower performers.

See the full graphic for more.

Related article: How efficient is your procurement process?

 

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Differences in how procurement processes are designed and executed can create more than a $4 million cost gap at scale.
Differences in how procurement processes are designed and executed can create more than a $4 million cost gap at scale.
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About the Author

Marisa Brown, Senior Principal Research Lead
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Marisa Brown is senior principal research lead, supply chain management, APQC.

View Marisa's author profile.

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