In the past four days, we have explored our New Year’s resolutions. We are now ready to reduce spend, prepare for new projects, engage in that green initiative and prevent contract evergreening. The most difficult step in any resolution is to see it through for the year to come. Today, I will provide additional tips that can keep your procurement strategies fresh and beneficial.
The selection and timing of your procurement events is an important factor in overall procurement success. Take the time to categorize your events based on level of complexity as well as spend dollars and you will find that you are able to maintain a mix of simple and complex events that keep your organization balanced and prevent overload.
Index pricing and renegotiation:
You will likely find that your contracts contain index pricing language. This might include Min/Max clauses and might even include caps to prevent your pricing from varying too much in a given timeframe. Monitoring your price changes as they occur will protect you against unjustified price increases and increases that are above the maximum levels allowed. You might also find benefit from monitoring the indices involved to ensure that you receive any applicable price decreases that you deserve.
By working with your strategic sourcing partner to follow the resolution enhancing tips from this series, you will enjoy a 2012 filled with procurement advances and greatly reduced spend.
Have a Safe and Happy New Year!
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