Strategies for an Unpredictable Economy

In any economic climate, effective management of
commodities presents a viable solution for companies
striving to contain costs and increase profits. An accepted
business tenet is that purchased products and services
account for 50 to 55 cents of every revenue dollar earned.
That represents the single, largest expense businesses
incur. Decreasing that expense can result in dollar-for-dollar
profit increases.

Integrated sourcing, procurement and distribution practices
used by CSG provide companies with the simplest means of reducing those costs. Plus, effective commodities management can particularly help retain profit goals during uncertain economic times.

A simple example: A health care system targeting a $1 million increase in net profits; it operates on a conservative 10% profit margin. One option to reach that $1 million figure is to simply increase sales by $10 million. Simple, right? Not quite. Especially not in wavering economic climates. Add in other profit eroders - rising overhead, cost of sale, market fluctuations and other business variables - all of which can adversely affect sales goals and undermine net profits.

The simpler choice for the health care system to hit that $1 million mark in increased net profits is to reduce its sourcing, procurement, and internal expenses by $1 million.

To counteract economic downturns, CSG has the specialists, resources, and systems in place to help companies trim down their operational and administrative expenses.