Smarter Sourcing

EP 25 - LogicSource's David Pennino on Finding Gold in Indirect Procurement

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David Pennino, CEO & Founder, built LogicSource by recognizing that indirect procurement represents the largest untapped opportunity for most enterprises. His conversation with John highlights how a company processing $150 billion in spend data approaches categories that consume 20% of revenue but receive minimal professional attention. David's methodology challenges traditional consulting models through comprehensive free assessments and frequency-based expertise that most organizations cannot develop internally.

 

David discusses his unique assessment-first approach, explaining how this model achieves a 93% win rate by proving value rather than promising it. His team's frequency advantage demonstrates how specialized expertise scales across complex procurement categories. The conversation also explores LogicSource's expansion into healthcare, where "wedding pricing" creates unique opportunities for systems that cannot pass cost increases to patients. 

 

Topics discussed:

  • The development of LogicSource's free assessment model and why it outperforms traditional consulting approaches in procurement transformation.
  • How frequency-based expertise in categories like software licensing, marketing services, and facilities management creates sustainable competitive advantages over internal teams.
  • The strategic addition of healthcare markets and why hospital systems face unique pricing challenges that indirect procurement can address.
  • Building category expertise by hiring professionals from both supplier and buyer sides to understand complete cost structures and margin opportunities.
  • The evolution of procurement from "three bids and a cloud of dust" methodology to comprehensive category management that considers relationships, quality, and strategic value.
  • Why GPOs often underperform compared to enterprise-specific procurement strategies for larger companies with significant spend volumes.
  • The importance of vision sessions in aligning procurement strategies with broader business objectives beyond simple cost reduction.
  • How AI will enhance procurement decision-making while requiring domain experts to train and validate machine learning outputs.
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