When an LOI or a Contract is delayed, the savings identified in the RFX will not start accumulating until the first invoice from the new supplier or the incumbent supplier arrives post contract.
Today’s post is by Ryan Melowic Director of Special Projects at SafeSourcing.
In today’s post, I will be reviewing some of the issues that could occur when a Letter of Intent (LOI) or a new Contract, doesn’t get executed efficiently after a successful eSourcing RFX.
LOI or a Contract is delayed
When an LOI or a Contract is delayed, the savings identified in the RFX will not start accumulating until the first invoice from the new supplier or the incumbent supplier arrives post contract. If a Contract is delayed, the RFX Host Company will have to pay the current contracts negotiated terms for products or supplies until the LOI and/or Contract is executed. Depending on the volume of the items, it could equate to a lot of lost savings.
When RFXs aren’t awarded efficiently
One of SafeSourcing’s many service offerings is identifying historical categories to take to market. Our goal is to create an RFX calendar that outlines future projects extending at least one year out. We then populate the calendar with past eRFXs that should be reruns due to previously negotiated contract expirations. We then identify upcoming potential spot purchases that are a result of our deep dive with our spend analysis tool into all category spending. When RFXs aren’t awarded efficiently these rerun dates will change and as a result may cause future issues with the strategic selection of targeted dates for new RFXs. If you slip 5 months which we see way to often, and prices are headed up over 41% of your savings may be lost.
For more information on how we can help your business reduce spending and maintain savings or on our “Risk Free” trial program, please contact a SafeSourcing Customer Service Representative. We have an entire customer services team waiting to assist you today.
We look forward to and appreciate your comments