Optimizing Supplier Relationships Perhaps more so than their brethren in other industries, financial services institutions, particularly insurance companies, rely extensively on outside suppliers for business operations.
What makes the situation highly complex for insurance companies is the need to manage suppliers in two key realmssuppliers of contract labor, known as services suppliers, and suppliers to replenish lost or damaged goods, known as goods suppliers.
Given the huge dollar amount that goes towards both services and goods suppliers, competitive insurance companies need to streamline their supplier relationships, “whittling down” their supplier ranks to include only the most high-caliber, readily available and affordable resources, while wringing optimal cost-savings out of contracts with preferred suppliers. The actual accomplishment of this feat, however, is anything but simple, primarily because suppliers contracts tend to be departmentalized and not leveraged across insurance companies.
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