May 17, 2024
Procurement Outsourcing Market

Procurement Outsourcing Market is Estimated to Witness High Growth Owing to Opportunity to Optimize Supply Chain Operations

Procurement outsourcing refers to outsourcing the procurement function of an organization in order to optimize supply chain operations. Procuring raw materials, components, and other indirect supplies can be a complex process requiring oversight and management. Outsourcing this function allows companies to focus on their core operations while benefiting from the expertise of procurement specialists. The global Procurement Outsourcing Market is estimated to be valued at US$ 5.94 billion in 2024 and is expected to exhibit a CAGR of 6.5% over the forecast period 2024-2030, as highlighted in a new report published by Coherent Market Insights.

The optimization of supply chain operations through procurement outsourcing presents a major market opportunity. Outsourcing the procurement process to specialists allows companies to leverage expertise, technology, and global reach to streamline purchasing. This can generate cost savings through bulk-buying power and efficiencies. It also provides access to a broad, qualified supplier network. With demand for increased visibility, control and agility across supply chains, procurement outsourcing enables companies to optimize operations while focusing on core areas of business.

Market Opportunity:

The opportunity to optimize supply chain operations through procurement outsourcing is expected to drive high growth in the market. Outsourcing to specialist procurement firms allows companies to leverage expertise in supplier selection, negotiations, purchasing protocols and technology. This enables accurate demand forecasting and ensures a reliable supply of quality materials. It provides flexibility to adjust procurement strategies based on market dynamics. By outsourcing non-core procurement functions, companies gain visibility and control over their supply chain at optimized costs. This enhances their competitive position and supports overall business growth objectives.

Porter’s Analysis
Threat of new entrants: Low risk of new entrants as procurement outsourcing requires specialized knowledge and high initial investments.

Bargaining power of buyers:Buyers have moderate bargaining power as they can choose from various procurement outsourcing providers.

Bargaining power of suppliers: Suppliers hold low bargaining power as there are many suppliers catering to specific service requirements.

Threat of new substitutes: Low threat of substitutes as procurement outsourcing aims at optimizing processes across supply chain to reduce costs.

Competitive rivalry: High as key players compete on service quality, expertise and global reach.

SWOT Analysis
Strength: Specialized domain expertise, focus on optimization, global reach and presence, strong client portfolio and relationships.

Weakness: Dependency on client contracts, high initial costs, risks of non-performance or delays.

Opportunity: Increasing global outsourcing, demand for specialized services, advancements in technologies.

Threats: Economic slowdowns, regulatory changes, security and data risks, competition from shared service centers.

Key Takeaways
The Global Procurement Outsourcing Market Demand is expected to witness high growth.

Regional analysis shows Asia Pacific is expected to grow at the fastest rate during the forecast period supported by increasing outsourcing adoption in major economies like China and India. Countries in the region provide outsourcing services at competitive costs.

Key players operating in the procurement outsourcing market include 3M, Cardinal Health, Smith+Nephew, Genadyne, DeRoyal Industries, Inc., Medela AG, Convatec Inc., Mölnlycke Health Care AB, PAUL HARTMANN AG, ATMOS MedizinTechnik GmbH & Co. KG, Talley Group Ltd, Cork Medical, LLC, and Devon Medical Products. Major players focus on expanding their global footprint and service offerings through mergers and acquisitions.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it