The study, from procurement consultancy Proxima and the Centre for Economics and Business Research, said 19 of Scotland’s largest firms are listed in the FTSE 350, also including Cairn Energy and Irn-Bru maker AG Barr.
Proxima said FTSE 350 firms would get a 27 per cent boost in core earnings from a 10 per cent cut in supplier spend – whereas they would receive just a 12 per cent increase from a 10 per cent drop in workforce costs. The State of Spend 2020 report also shows that average supplier costs make up 60 per cent of FTSE 350 companies’ total revenues.
The report also reveals significant variation between sectors. Companies in the industrials, consumer discretionary and consumer staples sectors have the highest supplier spend levels as a percentage of overall outlay, meaning they are most likely to benefit from spend reductions.
Proxima chief executive Gareth Evans said: “Our research demonstrates the crucial importance of managing external supplier costs. That 70 per cent of FTSE 350 companies’ spending now goes on suppliers should also be food for thought for executives looking for growth.”
A message from the Editor:
Thank you for reading this story on our website. While I have your attention, I also have an important request to make of you.
The dramatic events of 2020 are having a major impact on many of our advertisers - and consequently the revenue we receive. We are now more reliant than ever on you taking out a digital subscription to support our journalism.
Subscribe to scotsman.com and enjoy unlimited access to Scottish news and information online and on our app. Visit https://www.scotsman.com/subscriptions now to sign up. By supporting us, we are able to support you in providing trusted, fact-checked content for this website.