What is a GPO? We Explain

what is a gpo
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It seems like there is a new acronym on the Internet every week. Most recently, the acronym “GPO” has started cropping up online. Curiously (and perhaps frustratingly) to what it may refer won’t be clear from the GPO acronym itself, as it can refer to a couple of different things. (This is what happens when “professionals” start playing loosely with language.)

Generally speaking, in the context of online (or offline) businesses, a GPO refers either to a Group Purchasing Organization, or a Global Project Office (or alternatively a Global Project Owner).

According to the Healthcare Supply Chain Organization, Group Purchasing Organizations have been around since the early 1900s, and started with hospitals. In their excellent primer on GPOs, they say that the very first Group Purchasing Organization was the Hospital Bureau of New York.

As to how such GPOs work, says the HSCO, “GPOs do not purchase or buy any products. They negotiate contracts that hospitals can use when making their own purchases. With input from members and clients, GPOs work to negotiate contracts with healthcare manufacturers, distributors and other suppliers. After a group purchasing contract is created, it is still up to the hospital to decide which product is most appropriate in each circumstance and make the most appropriate purchase.”

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Of course, this would be the same for a Group Purchasing Organization GPO outside of the healthcare industry as well. In fact, according to the GPO page on Wikipedia, “Group purchasing is used in many industries to purchase raw materials and supplies, but it is common practice in the grocery industry, health care, electronics, industrial manufacturing and agricultural industries.”

The other way that the acronym GPO is most commonly used as it relates to business is for a Global Project Office or Global Project Owner. In this context, the usage refers essentially to global project management, and who is the owner of the global project, or the office from which it is being administered. It should be noted that this is by far the less common usage, in fact we think it may have been made up by a journalist seeking sources for an article on Global Project Owners/Offices.


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