In procurement terms leverage means the use of economies of scale to secure improved value. For example, aggregation of demand may give the buyer more leverage, as will reducing the variety of solutions to the same need, or reducing the number of contracted suppliers. The economic logic is that the supplier’s fixed costs can be spread over a greater volume and hence result in a lower price. In portfolio analysis, leverage categories are low in value and low in risk and the implied procurement strategy is to aggregate volume and secure competition to seek better terms. See also Economies of Scale and Portfolio Analysis.« Back to Glossary Index
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 consulting source materials.The Procurement Glossary has been compiled by industry expert Paul Rogers.