How does purchasing increase revenue and operating profit?

Is procurement just about cutting costs and delivering on time? Many companies still think so. Meanwhile, the role of modern purchasing departments goes significantly beyond „negotiating prices” and „chasing delivery dates”. Today, well-organised purchasing not only has a real impact on the operating costs, but also on increase in revenue.

In this blog post, we show how purchasing influences Bottom Line (EBITDA) and Top Line (revenue).

Bottom Line - how purchasing improves EBITDA

1. Consolidation of suppliers and standardisation - reduction in the number of suppliers and agencies.
2. Total Cost of Ownership - supplier selection throughout the product life cycle.
3. Cost Avoidance - avoiding future costs.
4. Supplier Productivity - joint improvement projects.
5. Reducing supply risks - securing alternative sources.

Top Line - how purchasing boosts revenue

1. Green purchasing - access to ESG projects.
2. Innovation with suppliers.
3. Time to Market - faster market entry.
4. Supply chain integration.
5. Availability of goods - no stock shortages.

Conclusions

• Purchasing is a source of value, not just a cost.
• The best companies integrate purchasing with strategy.
• Purchasing is a viable growth lever.