As they say at NIKE. Just do it!

August 11th, 2009

Of course I?m talking about COST SAVINGS opportunities through the use of e-negotiation tools. Why do companies fight this so?

Of course I?m talking about COST SAVINGS opportunities through the use of e-negotiation tools. Why do companies fight this so?

I have met with many retailers and rolled out examples that reflect savings driven by recent e-negotiations by other retailers with a similar format and located in the same geography. Many of these examples are less than twenty four hours old. As real as these results are, it is still difficult for the retailer to pull the trigger and give a new process a try. This is even true for hosted full service events, where there is little for the retailer to do. We just seem to get in our own way sometimes because we have too many other important things to do.

In this case let?s assume that the companies CEO is in the meeting and directs that he or she would like the cost of goods reduced ASAP. The project is then assigned to the Senior Vice President of Supply Chain or Chief Logistics Officer or Chief Procurement Officer or some other senior executive. This is then further assigned to the Vice President of Procurement who in turn assigns it to some director. The director convenes meetings of the buyers or category managers responsible for a variety of category spend. Now the excuses begin.

1. We can?t damage our relationship with our suppliers.
2. We get the best price in the industry right now.
3. These guys don?t know what they are talking about.
4. Don?t we have a tool that does this in our ERP system?
5. We?ll sacrifice quality.

I could go on an on with more excuses or objections, but I think most of you get my drift. Everyone has one. Have you ever heard the quote that ?A camel is a horse created by committee?? Well, here we are in the stable again.

If we go back to the CEO and explain what the situation is, one is likely to get a reply that says as the Nike commercial does; JUST DO IT! Unfortunately that needs to be followed by; DO IT KNOW! And, I?ll be watching.

From start to finish, the e-negotiation process should take no more than two weeks to complete. This includes the entire process including and RFI if necessary from the day a retailer says go to the award of business. With that said, there are several requirements necessary to accomplish this. These eliminate the worry and mitigate the risk. They are also easy if you choose the right provider.

1. A robust supplier database.
2. A robust event specification library.
3. An intuitive set of tools for configuring the R?s.
4. Automated reporting tools that provide immediate result details.

Stop the excuses. If you are really interested in improving your bottom line now, you are less than two weeks away from immediate results. As they say at NIKE. Just do it!

We appreciate and look forward to your comments.

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