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The group purchasing organization (GPO) service market size is forecast to increase by USD 2.06 billion at a CAGR of 5.6% between 2023 and 2028. The market is experiencing significant growth due to several key trends and factors. One major driver is the advantage in cost savings and efficiency that GPOs provide to their members through consolidated purchasing power and negotiated contracts. Another trend is the digital transformation in GPO services, which includes the use of advanced technologies such as artificial intelligence, machine learning, and data analytics to enhance operational efficiency and member experience. Managing diverse member needs is also a significant challenge for GPOs, requiring them to offer customized solutions and adapt to various industries and sectors. These trends and challenges are shaping the future of the GPO service market and driving innovation and growth in the industry. The market report forecasts market size, historical data spanning from 2018-2022, and future projections, all presented in terms of value in USD billion for each of the mentioned segments.
In the healthcare sector, Group Purchasing Organizations (GPOs) have emerged as crucial players in supply chain management. These organizations leverage collective buying power to negotiate favorable prices for healthcare supplies, office supplies, software, and other essential items. By implementing strategic sourcing and predictive purchasing strategies, GPOs help healthcare providers optimize their budgets and manage costs effectively. The use of digital platforms and data analytics in GPO services has revolutionized procurement strategies. Digital tools enable data-driven optimization, allowing organizations to make informed decisions based on real-time market data. This results in improved supply chain operations and stronger supplier relationships. The complexity of the healthcare supply chain necessitates the adoption of digital technologies, such as automation and TCO (Total Cost of Ownership) analysis, to streamline processes and enhance ROI (Return on Investment). GPOs provide access to a wide range of products, including advanced medical equipment like endoscopes and bronchoscopes, ensuring healthcare providers have access to the latest technology while minimizing costs. In summary, GPO services play a pivotal role in the healthcare sector by offering cost management solutions, budget optimization, and strategic sourcing through digital platforms and data analytics. These organizations help healthcare providers navigate the intricacies of the supply chain, fostering strong supplier relationships and ensuring access to essential supplies while maximizing efficiency and ROI.
The market report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD billion " for the period 2024-2028, as well as historical data from 2018-2022 for the following segments.
The vertical GPOs segment is estimated to witness significant growth during the forecast period. In the healthcare sector, Group Purchasing Organizations (GPOs) have emerged as strategic partners for healthcare providers in managing procurement and supply chain complexities. By leveraging the collective buying power of its members, a GPO enables healthcare providers to negotiate favorable contracts for medical equipment, food procurement, medical services, and other healthcare supplies. These organizations employ various procurement strategies, such as data-driven optimization, predictive purchasing, and strategic sourcing, to ensure cost management and budget optimization. Digital technologies and platforms play a pivotal role in GPOs' operations. Data analytics tools help in identifying trends, forecasting demand, and optimizing inventory levels.
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The vertical GPOs segment accounted for USD 2.26 billion in 2018. Digital platforms facilitate efficient contract management and enable real-time communication between healthcare providers and suppliers. Horizontal GPOs cater to multiple industries, while vertical GPOs focus on specific sectors like healthcare, offering more specialized services. GPOs' negotiating power extends beyond cost-effective contracts. They also help healthcare providers improve operational efficiency, reduce costs, and ensure data security through digital tools and consulting services. The fragmented nature of the healthcare sector necessitates effective supply chain management, which GPOs provide through their extensive supplier relationships. Direct procurement and consulting services further enhance their value proposition. Overall, GPOs contribute significantly to the healthcare sector by streamlining procurement processes, reducing costs, and improving operational efficiency.
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North America is estimated to contribute 42% to the growth of the global market during the market forecast period. Technavio's analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. The market is a dynamic and evolving industry that offers various solutions to businesses seeking to optimize their purchasing power and supply chain operations. These solutions include Training and Support, Advisory Services, and software solutions such as Total Cost of Ownership (TCO) analysis and Return on Investment (ROI) calculation tools. Automation plays a significant role in the market, with offerings ranging from cloud-based E-Sourcing and E-Purchasing platforms to on-premises software types. GPOs cater to diverse industries, including healthcare, where they provide supply chain solutions for medical equipment like endoscopes, bronchoscopes, and rhinolaryngoscopes. Organizational strategy is a crucial aspect of GPO services, with offerings in supplier management, strategic alliances, and recruitment of skilled personnel. Procurement-to-Pay (P2P) solutions are also popular, enabling small, medium, and large enterprises in industries such as industrial and agricultural sectors to streamline their procurement processes.
Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The advantage in cost savings and efficiency is notably driving market growth. In the healthcare sector, Group Purchasing Organizations (GPOs) have emerged as valuable partners for healthcare providers in implementing effective procurement strategies. By pooling the buying power of multiple organizations, GPOs enable healthcare providers to negotiate favorable contracts for medical equipment, food procurement, medical services, and other supplies. This collective buying power translates into cost-effective contracts, enabling significant cost savings of up to 25% on procurement expenses. GPO services streamline procurement processes through digital platforms and data-driven optimization. Digital tools facilitate strategic sourcing, contract management, and bulk purchases. Horizontal GPOs focus on common supplies, while vertical GPOs cater to specific industries, such as healthcare. Digital technologies, including data analytics and predictive purchasing strategies, enhance operational efficiency, reduce supply chain complexity, and improve supplier relationships.
Moreover, GPOs offer consulting services to help healthcare providers optimize their procurement processes and ensure data security. The implementation of GPO services results in substantial cost reduction, budget optimization, and improvements in operational efficiency. Despite the benefits, the fragmented nature of the healthcare sector poses challenges in implementing GPO services uniformly across the industry. However, the potential for cost savings and improved operational efficiency make GPO services an attractive proposition for healthcare providers. Thus, such factors are driving the growth of the market during the forecast period.
The digital transformation in GPO services is the key trend in the market. Group Purchasing Organizations (GPOs) in the healthcare sector are undergoing digital transformation, leveraging advanced technologies to streamline procurement processes and deliver superior value to members. This shift includes the adoption of digital platforms for supply chain management, data-driven optimization, and predictive purchasing strategies. This platform automates tasks such as purchase order processing and offers real-time data and insights, aiming to reduce costs and improve operational efficiency across various healthcare settings. The use of digital tools in GPO services also strengthens supplier relationships, ensures data security, and enables cost reduction through bulk purchasing and cost-effective contracts.
Additionally, GPOs cater to diverse needs in the fragmented healthcare industry, offering strategic sourcing for medical equipment, food procurement, medical services, and more. The implementation of digital technologies in GPO services is a game-changer, enabling data analytics, contract management, and consultative services to optimize budgets and improve care delivery models. Thus, such trends will shape the growth of the market during the forecast period.
Managing diverse member needs is the major challenge that affects the growth of the market. In the dynamic and fragmented healthcare sector, Group Purchasing Organizations (GPOs) play a crucial role in enabling collective buying power and cost savings for member organizations. GPOs offer strategic sourcing solutions through negotiating power, data-driven optimization, and predictive purchasing strategies. These organizations cater to various industries, including healthcare providers, with unique procurement priorities and regulatory requirements. Healthcare providers focus on care delivery models, medical equipment, food procurement, and medical services, necessitating compliance with stringent regulatory standards. In contrast, manufacturing companies prioritize supply chain efficiency and cost reduction, requiring a focus on operational excellence and direct procurement. GPOs must balance these diverse needs with standardization and centralization to maintain overall efficiency and cost-effectiveness.
Further, digital platforms and tools, such as data analytics, digital technologies, and contract management systems, facilitate data-driven optimization and supplier relationship management. GPOs provide cost-effective contracts, bulk purchases, and consulting services to streamline supply chain complexity and enhance operational efficiency. The integration of digital technologies, including data and analytics, data security, and IT and technology solutions, further supports cost reduction and budget optimization. Horizontal GPOs cater to multiple industries, while vertical GPOs focus on specific sectors, such as healthcare. Regardless of the GPO type, the goal remains the same: to help member organizations navigate the complexities of procurement and achieve cost savings through strategic sourcing and supplier relationships. Hence, the above factors will impede the growth of the market during the forecast period.
The market forecasting report includes the adoption lifecycle of the market, covering from the innovator's stage to the laggard's stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Centerpoint Group LLC - The company offers group purchasing organization services for different categories such as office supplies, MRO and industrial supplies, wireless telecom, recycling and waste management and others.
The market research and growth report also includes detailed analyses of the competitive landscape of the market and information about key companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market in the healthcare sector is witnessing significant growth due to the increasing focus on strategic procurement strategies. With the fragmented nature of healthcare, GPOs offer collective buying power to healthcare providers, enabling cost-effective contracts for medical equipment, food procurement, medical services, and other supplies. The use of digital platforms and data analytics enables data-driven optimization and predictive purchasing strategies, enhancing operational efficiency and cost reduction. GPOs cater to both horizontal and vertical markets, offering solutions for IT and technology, facilities management, consulting services, and more. The negotiation power of GPOs allows for cost management and budget optimization, addressing the complexity of supply chain and supplier relationships. Digital tools and data security are essential components of GPO services, ensuring seamless supply chain operations and secure data exchange. In the healthcare sector, GPOs play a crucial role in supply chain management, enabling healthcare providers to focus on care delivery models while optimizing costs. The implementation of digital technologies and data analytics in GPO services enables strategic sourcing, contract management, and bulk purchases, ultimately leading to cost savings and improved patient care.
Market Scope |
|
Report Coverage |
Details |
Page number |
200 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 5.6% |
Market growth 2024-2028 |
USD 2.06 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
5.4 |
Regional analysis |
North America, Europe, APAC, Middle East and Africa, and South America |
Performing market contribution |
North America at 42% |
Key countries |
US, China, Germany, UK, Canada, and Japan |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Centerpoint Group LLC, Clarity Ventures Inc., CNECT Inc., Compass Group Plc, Corcentric Inc., CPG, DSSI, The Health Collaborative, HPS LLC, LBMC, McKesson Corp., OMNIA Partners, Pandion Optimization Alliance, Planergy, Premier Inc., Procure Analytics, The Health Collaborative, Treya Partners., UNA, and Vizient Inc. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the market forecast period. |
Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Technavio Analysis
3 Market Landscape
4 Market Sizing
5 Historic Market Size
6 Additional Value/Volume Data
7 Five Forces Analysis
8 Market Segmentation by Type
9 Market Segmentation by End-user
10 Customer Landscape
11 Geographic Landscape
12 Drivers, Challenges, and Opportunity/Restraints
13 Competitive Landscape
14 Competitive Analysis
15 Appendix
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