Unlocking Hidden Value

ERA Group's article starts from a reality many leadership teams recognise: margins that were manageable a couple of years ago are now under pressure from several directions at once. Wage inflation, raw material prices, energy, freight, warehousing, insurance and technology costs are all climbing, and tariff and trade policy uncertainty adds further risk to the supply chain.

Its central argument is that the conventional responses — raising prices, cutting headcount, deferring capital investment — all carry clear trade-offs, while a lower-disruption lever is often overlooked: the existing supplier base and operating budget. ERA Group describes how most organisations concentrate procurement discipline on the largest strategic suppliers, while the remaining supplier base — what procurement teams call tail spend — is handled as a secondary responsibility by managers without deep category expertise, with scarce benchmarking data and incomplete spend visibility.

According to the article the barriers are structural rather than a sign of poor management: confirmation bias about existing pricing being competitive, inertia in long-standing supplier relationships, the limitations of group purchasing organisations, and the absence of external benchmarks. Suppliers, meanwhile, are sophisticated pricing professionals who segment their customers. The article therefore emphasises total cost of ownership — quality, reliability, processing cost and rework — as harder to assess but more relevant than the lowest quoted price.

The content is ERA Group's own, based on ERA Group's engagements. Figures cited are the article's observations and should not be read as an outcome promise from JMF Europe. The original English article remains the complete source.