Group Purchasing Organizations (GPO) An Even Better Great Career Move

March 28, 2011


Group Purchasing Organisations (GPO’s) are nothing new. A GPO is an entity that is created to leverage the procurement power of a group of businesses in order to gain better discounts from vendors on behalf of the collective buying power of its members. In North America the first GPO was established in Healthcare in 1910 in the US.

Vertical market Group Purchasing Organisations provide companies within a specific market segment such as Healthcare by providing diverse healthcare providers to come together to effectively manage their expenses. Today this is true for practically all procured products within healthcare with the exception of pharmaceuticals which are often still bought at the individual hospital level. Other examples of vertical GPO’s would be Foodservice & Grocery as well as within Agricultural & Industrial Industries and it is extremely exciting to see the list growing daily.

Horizontal market Group Purchasing Organisations provides the same leverage as the vertical market but assists companies across a far broader spectrum of industries and has such a scope of opportunity to business as a whole. The member-client organizations in a horizontal GPO have the consolidated buying power and ability to leverage off established contracts thus achieving preferred pricing on hard and soft goods such as temporary labour costs, IT hardware, software and consulting, communications, network and engineering services as examples. The savings potential is phenomenal and over the next five to ten years, it is expected that horizontal market GPO’s will flourish as companies band together to take advantage of better buying power.

Over the last few years, In Canada and the US, Group Purchasing Organisations have slowly been increasing their grip on the procurement landscape. Procurement Professionals whose talents continue to remain in high demand need to be taking a good hard look at educating themselves at Group Purchasing Organisations. The new reality is that GPO’s are an employer of choice these days. They are the organizations where the really interesting stuff is happening – where you can beef up your procurement strategies on resume and stay at the ‘leading, bleeding edge’.

It will not be of great surprise that more of these Group Service Organisations (both Public Sector and private) come on line faster and that they take a dominant seat at the table when in comes to hiring the ‘cream of the crop’ strategic sourcing talent. The best, most interesting and challenging plum purchasing and supply chain jobs will be in these GPO’s.

Argentus Search Group, whose specialty is that of Procurement, Strategic Sourcing and Supply Chain has a strong knowledge base about Group Purchasing Organisations and has recently staffed several initiatives for GPO clients.


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