The general rule-of-thumb is that when acquiring items through a negotiated contract, a 15% savings is expected. In order to take advantage of that on-contract savings, a company must accurately track its spend on the particular items for which it wants to drive contracts. That means that purchases of the on-contract items need to utilize both the contract and the item master included on the contract.
When company personnel fail to search for or find the material, or instead use free-text to purchase the item, the on-contract price is not used. In fact, many times a different supplier is used, further fragmenting supplier spend. This “contract leakage” undermines the strategic sourcing processes that analysts within procurement have used to cut costs on a particular item. When purchasing the same item from a non-contract supplier, the buyer is effectively throwing away money.
To stop such things from happening, searches must be efficient and rapid. That requires structured, standardized descriptions to drive effective searches. Structured searches using common search formats can also yield rapid results. Consider using Structured Text Generator from PiLog to develop effective, structured descriptions following data industry standards.