XYZ Ltd decides to go to market for a cleaning contract to service a number of offices. It knows that it will get a price which may, or may not, be…

This scenario is a clear example of volume consolidation across categories. The organisation is bundling several distinct service categories (cleaning, gardening, security, maintenance) that were likely sourced separately before. By combining these different categories into a single, high-value contract, the buyer increases its leverage with potential suppliers who can offer a total facilities management solution. This strategy aims to achieve better pricing and simplified contract management by aggregating spend across previously fragmented areas, rather than just increasing the volume within a single category.

A. A purchasing consortium involves multiple separate organisations joining their buying power, which is not described in this scenario involving a single company.
C. Volume pooling typically refers to aggregating identical requirements from different parts of a single organisation, not combining different categories of spend.
D. Volume redistribution involves rationalising the supply base by channelling more business to fewer suppliers within the same category, not combining categories.

- CIPS. (2018). Defining Business Need L4M2. Stamford, UK: Chartered Institute of Procurement & Supply. (Chapter 5 covers spend consolidation and describes combining spend across different categories as a key strategy).

- van Weele, A. J. (2018). Purchasing and Supply Chain Management (7th ed.). Cengage Learning. (Chapter 6, "Sourcing Strategies," discusses commodity strategies including volume concentration, which encompasses consolidating spend across business units and categories).

- Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2016). Purchasing and Supply Chain Management (6th ed.). Cengage Learning. (Discusses sourcing strategies, including consolidating the number of suppliers and bundling requirements to gain leverage).