Part II of II. Are retail companies planning for their annual e-procurement health checkup?

October 24th, 2008

We discussed yesterday whether applying the same strategy that we should for our personal health was also an intelligent plan when looking at our annual e-procurement results?

We discussed yesterday whether applying the same strategy that we should for our personal health was also an intelligent plan when looking at our annual e-procurement results?

The list of 15 questions I promised yesterday that companies can ask themselves with the resulting answer going into either an assets or liabilities column are listed below for your review.

1. How many new suppliers were reviewed to provide new or existing products and services during the past year?
2. How many of those suppliers were actually selected to provide new products or services during the past year?
3. How much of your total spend was assigned to e-procurement tools such as RFI’s and Reverse Auctions.
4. How much of your private label spend was assigned to e-procurement tools such as RFI’s and Reverse Auctions.
5. How much of your services spend was assigned to e-procurement tools such as RFI’s and Reverse Auctions.
6. How much of your supplies spend was assigned to e-procurement tools such as RFI’s and Reverse Auctions.
7. How many of your category managers and or buyers have on line accessible product and services specifications for each product or service they buy.
8. How much time is invested in gathering product specifications?
9. How much were your total cost of goods reduced during the past 12 months through the use of e-procurement tools.
10. How much was your gross margin improved by reduction in cost of goods during the last 12 months as a result of using e-procurement tools.
11. How much time do category managers and suppliers spend doing supplier research weekly.
12. How many suppliers have been contributing greater than 75% of specific category volume for a period of greater than 5 years?
13. Of those suppliers, how many provide multiple products and or services to your company?
14. Are you satisfied with the product safety of all products from all sources?
15. How much was total company net profit improved by the use of e-procurement tools last year?

Please feel free to join the conversation and add additional questions so that retail procurement professionals can use them during their end of year planning process. It’s also important to remember that if a company assigns just ten percent (10%) of their cost of goods to e-procurement tools, net earnings can improve by up to 82% or more.

We appreciate and look forward to your comments.

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