From Yoga Pants to Putters: LogicSource Helps Companies Slash Procurement Costs
This article was originally published by Executive Edge.
When you walk into a retail store, there’s a whole lot more going on that just items for sale. There are thousands of small categories that affect a company’s bottom line.
These outsourced goods and services can absorb 20 percent of revenue and include marketing, information technology, facilities and logistics management, packaging and professional services.
Meet Norwalk, Connecticut-based LogicSource, a procurement services and technology provider that is changing the game. With its innovative and transparent approach, the company is reshaping the way businesses buy, delivering tangible results and unlocking substantial cost savings.
Led by Founder and CEO David Pennino, the company’s groundbreaking approach ensures that clients don’t spend a dime until they see measurable results. And by leveraging a suite of pre-built assets, including a world-class supplier ecosystem, a sourcing and procurement center, along with Saas technology, LogicSource provides rapid and customizable solutions.
What sets LogicSource apart is its unique investment-based business model. Rather than charging upfront fees, the company aligns its success with that of its clients. By sharing in the risk and reward, this creates a true partnership that drives accountability and guarantees results. LogicSource provides the expertise, tools and resources necessary to optimize procurement strategies for clients.
Procurement, traditionally seen as a mundane and overlooked function, has emerged as a hot topic across multiple sectors. The COVID-19 pandemic exposed vulnerabilities in global supply chains, leading to shortages, skyrocketing prices and logistical nightmares.
The retail sector has been particularly fertile ground. With thousands of categories to manage, from marketing and digital to facilities and IT, retailers face a complex web of procurement needs. LogicSource’s deep understanding of the retail landscape, coupled with its proven track record, positions it as the go-to partner for companies seeking to optimize their indirect spend and drive sustainable growth.
Businesses across other sectors have also realized the critical importance of efficient procurement processes and the need to mitigate risks. In fact, the pandemic prompted LogicSource to diversify into consumer packaged goods and healthcare.
Opportunities in healthcare abound. Hospitals, burdened by rising costs and thin margins, have traditionally paid more for nonclinical items compared to corporations.
LogicSource’s intervention offers a lifeline, delivering substantial savings in areas such as marketing, technology, facilities, and logistics management. By tackling these expenditures, LogicSource empowers healthcare institutions to allocate resources where they matter most—providing quality care to patients.
When it comes to competition, LogicSource’s investment-based approach and on-site presence set it apart from the rest. Unlike management consultants or offshore procurement providers, LogicSource combines deep industry knowledge with hands-on support.
The likes of McKinsey and BCG are great with big-picture strategy but can fall short on execution. Rather than delivering flashy PowerPoint presentations, LogicSource actually does the buying.
The company builds lasting partnerships with its clients, many of which are known to be the very vest in their respective fields. Just to name a few, LogicSource works with Lululemon Athletica Inc., Tractor Supply Company, Rite Aid Corp., Société BIC SA (commonly known as BiC), WellSpan Health, Acushnet Holdings Corp.’s Titleist.
Looking ahead, LogicSource’s partnership with growth investor FTV Capital, coupled with its impressive financial performance and expanding client base, positions it for remarkable growth and market domination. LogicSource’s commitment to continuous innovation, fueled by its proprietary OneMarket technology platform, ensures that it remains at the forefront of procurement.
While there are competitors, LogicSource has found a niche in the $1 billion to $20 billion market cap space. Those companies have plenty of costs to cut but generally won’t have an internal procurement team that’s as effective as LogicSource.
The numbers back up LogicSource’s impressive story. In an era when many young companies remain in the red, LogicSource boasts a five-year track record of profitability. It’s also growing at a blistering pace, with an expected revenue growth rate of 170% from 2020 to 2023.
It also manages a whopping $85 billion in spend and pricing data for its aggregate client base. That translates to over 15,000 annual sourcing events supported by a team of more-than 120 category experts.
While still a private company, LogicSource offers a unique value proposition that is revolutionizing the world of procurement. Savvy investors will want to keep an eye on this one.
The innovative leader in procurement services and technology, LogicSource is purpose-built to drive profit improvement, mitigate risk, and ensure supply chain continuity through better buying. LogicSource focuses exclusively on the sourcing and procurement of indirect goods and services, which typically represent 20% of an organization’s revenue and the area of greatest spending inefficiency. These include complex categories like marketing, packaging, corporate services, facilities, information technology, distribution and logistics and more, for which organizations often lack the capacity, focus and scale to achieve best-in-class buying. Unlike traditional advice-based consultants, LogicSource is a purpose-built buying utility with assets that are configurable to their clients’ needs and ready to deploy. By combining decades of sourcing and procurement expertise, superior market intelligence, cross-portfolio spending leverage, and their OneMarket® Source-to-Pay technology, LogicSource executes customized solutions that deliver immediate savings and sustainable value. For more information visit www.logicsource.com.