Tethys Logistics

Integrating Purchasing, Logistics Yields Better Business Results :-
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Organizations that closely integrate their purchasing and logistics functions deliver better business results, according to a new study from UT’s Global Supply Chain Institute.

But the study, involving more than 180 supply chain professionals, also shows that many firms fail to capitalize on this opportunity and have supply chains where purchasing and logistics operate in “silos” with little cohesion.

“Together, purchasing and logistics can account for 70 percent of an organization’s costs and influence 80 percent of its working capital through inventory and accounts payable,” said Ted Stank, UT Bruce Chair of Excellence and one of the study’s authors. “Clearly, purchasing and logistics have a huge impact but often won’t collaborate with each other to make decisions that will positively impact the firm’s overall performance.”

According to the study, metrics that are specific to each function and are used to measure (and reward) performance drive decisions. These are often geared toward short-term financial gain.