What Is a GPO?
A group purchasing organization is a company that leverages the purchasing power of its members to negotiate special pricing with suppliers. As a result, its members have access to the products they need at prices they would not otherwise be offered.
Why Join a GPO?
Being part of a group purchasing organization empowers an organization to reduce their costs, reinforce their supply chain, and make more informed purchasing decisions. Working with a procurement partner also frees up organizations to concentrate on their day-to-day activities without the stress of paying for overpriced products or finding reliable suppliers.
Many organizations join GPOs to save money on the products and services they use every day. According to the Healthcare Supply Chain Association (HSCA), purchasing organizations provide $55 billion in cost savings to members every year. The same report also concluded that GPOs are expected to save the healthcare system more than $450 billion from 2017 to 2026.
While GPOs help their members save through the discount prices they’ve negotiated with suppliers, they can also optimize their members’ existing supply strategies to achieve further savings. CNECT does this in multiple ways, including analyzing accounts payable lists and comparing a member’s current suppliers against its portfolio of contracts to identify savings with suppliers they’re already purchasing with.
create contracts on its own, purchasing organizations simplify the process by negotiating on behalf of their members and connecting
their members directly to these aggregated contracts. As a result, organizations and their staff can concentrate their efforts on their
A group purchasing organization will do more than connect you to reduced pricing on products and services. In some instances, a GPO will serve to reinforce procurement practices for businesses and organizations in the wake of crises and shortages, such as the COVID-19 pandemic. They do so by working to expand supplier contracts based on member needs and potential supply issues.
GPOs often work with their members to provide much-needed market research, innovative technology integration, infection control, product tracking, and benchmarking. These additional services can enhance supply chain awareness and ensure only the best purchasing practices are being followed. As a result, GPOs can broaden efficiencies across an organization. Take the healthcare industry for instance, wherein purchasing organizations have been able to boost overall efficiency which often results in not only reduced costs, but improved patient care as well.
CNECT also goes the extra mile to support its members, providing a plethora of resources such as newsletters, webinars, and blog posts that provide valuable insights and keep members informed of industry news.
How Does a GPO Work?
A GPO connects organizations with negotiated contracts on the products and services they need and suppliers with buyers. Members access cost savings and suppliers access a new audience — everyone wins.
They negotiate contracts with distributors and manufacturers with a focus on providing cost savings for members, while still benefiting the supplier by giving them access to an audience that requires their product.
Once a contract agreement is reached, the supplier will be available within a GPO's contract roster. A GPO won't make any purchases themselves but will instead connect their members to contracts and suppliers that ensure their members' supply chain needs are met while also saving them time and money.
GPOs like CNECT accumulate revenue by collecting small fees from suppliers, with no costs attributed to the member. As a result, an organization or business can reap all the benefits of a GPO membership without having to pay a penny.
The CNECT Difference
CNECT specializes in providing supplies and services for a wide range of companies, including educational institutions, businesses, ambulatory care centers, community health centers, physicians’ offices, and other healthcare organizations.
We’re an affiliate of Premier Inc., one of the largest group purchasing organizations in the country. Through this partnership, our GPO members can take advantage of more than $69 billion in purchasing power. When you become a CNECT member, you’ll gain the guidance and expertise of a team of nationwide representatives dedicated to supporting your organization and providing custom savings. Click here to learn more about what makes CNECT the right GPO for your organization.