Group Purchasing Organisations


Group purchasing organisations (GPO) negotiate the purchase of goods and services on behalf of their members. The concept reviews GPSs and their business models, discusses the benefits of using GPO for organisations and presents some weaknesses and success factors of this approach to purchasing.

Technique Overview

Group Purchasing Organisations Definition

Group purchasing is a principal strategy by which companies in many sectors (e.g. healthcare, food and groceries, industrial manufacturing) achieve cost containment, improve the quality of goods purchased and allow staff to focus their efforts on other activities (Schneller, 2000). A group purchasing organisation (GPO) is a purchasing group that has either a formal or virtual structure that facilitates the consolidation of purchases for many organisations. The most representative industry and the primary area of GPOs at the moment is that of healthcare (Nollet and Beaulieu, 2005).

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Business Evidence

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Business Application

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Success Factors of Group Purchasing Organisations *

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Further Reading

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Group Purchasing Organisations References (4 of up to 20) *

  • Anderson, M. and Katz, P. (1998) Strategic Sourcing. International Journal of Logistics Management, Vol. 9(1), pp. 1-13.
  • Bloch, R., Perlman, S. and Brown, S. An Analysis of Group Purchasing Organizations’ Contracting Practices Under the Antitrust Laws: Myth and Reality. Working paper. [online] Available at: www.ftc.gov/ogc/healthcarehearings/docs/030926bloch.pdf [Accessed: 28 January 2012].
  • Carr, A. and Smeltzer, L. (1999) The Relationship Among Purchasing Benchmarking: Strategic Purchasing, Firm Performance and Size. The Journal of Supply Chain Management, Fall, pp. 51-59.
  • Deloitte White Paper (2008) GPO Pricing Study: Guidelines for Success. [online] Available at: www.novationco.com/pressroom/industry_info/deloitte_gpo_pricing_study.pdf [Accessed: 28 January 2012].

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