What are you doing in order to understand and develop the goals you are trying to accomplish when preparing for your sourcing projects?
Today’s post is by Mark Davis; Sr. Vice President and COO at SafeSourcing.
This week we are taking a look at how two procurement professionals approached the same containerboard project with their respective company. Ray and John took different approaches to understanding the containerboard market, suppliers, and company atmosphere and were now prepared to start looking at the goals they wanted to achieve with their respective projects.
Ray would love to be able to source this containerboard project and consolidate his vendors, learn more about new vendors in the market and, of course, control his costs. Unfortunately he just doesn’t have the time to do it all.
With the lack of time and the fact that his boss has been constantly talking with Ray about how the company can reduce their cost of goods, Ray has resigned himself to the fact that cost is the goal he is going to focus on during this event. Ray knows that by focusing on cost alone that he will likely scare off new vendors who have no interest in investing time in a bidding war and that he will create some ill will with his current vendors, but he has limited time to invest on this project. As such, Ray spends the next few weeks on the phone and communicating through email with his incumbents trying to get them to reduce their costs, leaving the several divisions doing their own thing to continue with business as usual.
John, on the other hand, has chosen to invest some of his time with his company’s other departments and has made a name for himself within the company as someone who really is trying to understand the total picture relative to this and other categories. This gives him the latitude to begin to investigate some potential goals that reach beyond cost of goods only and gives him the executive backing to pursue them.
John knows that he needs to take a step I towards consolidating his vendors. With so many divisions doing their own thing, he knows that one goal of this project is to leverage the company’s overall spend and standardize on a process in order to help his company control total cost. His plan to put part of the responsibility of this monitoring back with the vendor will create even greater potential savings and provide him with tools to show the results.
John also knows that there are evolving programs within his company that will be affected positively by this project if he completes the due diligence in order to understand what each vendor can offer beyond just pricing. The other departments probably never thought that containerboard spend would help them accomplish their new initiatives but John in understanding all of his companies initiatives understands the benefit that selecting the best overall vendor could provide his company.
John also realizes that at the end of the day reducing his cost of goods is still an important goal so he plans to invite several new vendors he has identified along his incumbents to participate in an online pricing gathering event. This event that he will conduct through his eProcurement solutions provider will allow vendors to see and adjust their pricing based on their ranking in a way they see fit and feel comfortable with, but in a way that also benefits John’s company. John is convinced that the investments and research he has done will pay big dividends in meeting new corporate initiatives, optimizing vendors and reducing his cost.
Stay tuned Monday as the final piece of the story of Ray and John unfolds. You may be like Ray but desperately want to operate like John but without the staff or the time to dedicate at that level.
At SafeSourcing we understand Ray’s frustration and that is why our customer services team works with you to achieve great results while removing much of the work from your plate. For more information on how we can help you with your sourcing projects, please contact a SafeSourcing Customer Service Representative. We have an entire customer services team waiting to assist you today
We look forward to your comments.