Many organisations seek to reduce their cost base and in this context the term refers to the nature and the sum of all the inputs to the business. For example, value-based airlines seek a lower cost base than full-service airlines and to do this they typically employ fewer staff, on more flexible contracts, operate in cheaper locations and specify standards that not only reduce the cost of their operations, but allow more flexibility in the event of an economic downturn. This affects procurement practices as they may outsource some processes to create a more flexible cost base and also lease rather than buy aircraft for the same reason. See also Cost Leadership.
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Discover the world’s largest Glossary of Procurement terms
With over 800 Procurement specific terms (and growing) you will find everything you need to know or thought you knew about the Procurement function. Our aim is to provide you with a comprehensive list collated from the Comprara Groups hub of training and procurement consulting source materials.The Procurement Glossary has been compiled by industry expert Paul Rogers.
