Realize savings faster by knowing what to do.
Today’s post is by Dave Wenig, Regional Sales Manager at SafeSourcing.
First, the good news. You’ve successfully completed an eProcurement event and you have a very significant opportunity to realize the savings generated by that effort.
The question many ask at this point is; now what do I do?
- Review the results in detail: Following a successful eProcurement Request for Quote (RFQ) event, you should take the time to fully review the results of the RFQ. Of course, you’ll want to take a close look at the pricing entered during the process, but there is much more involved. You will also review any notes that the participating suppliers entered to accompany their quotes. Perhaps you’re also interested in understanding how and when suppliers entered their quotes. What was the activity level and what can you learn from the bid activity? As a result of any SafeSourceIt™ RFQ, you’ll have all of this information and more at your fingertips.
- Lean on your partner: Often, even after reviewing the results, the best path might still be unclear. For example, perhaps you now have several potential suppliers who could meet your needs and are offering their products at roughly the same price. How do you choose between them? One way to make this decision easier is to confer with your eProcurement partner. While they may not be in the position to make the award decision for you, they might have insight as to what other factors you might take into consideration. Is this a category for which samples are commonly tested? What recommendations does your partner have relative to that sampling process? Did any vendor go above and beyond and offer up additional benefits such as more favorable payment terms or a rebate program? Your partner has experience reviewing the results of an RFQ. Ask their advice.
- Keep negotiating: The RFQ is not the end of the negotiations, it’s just another step. At the conclusion of an RFQ, you may deem a supplier to be the best overall value, even if that supplier is not the lowest cost provider. Internal pressures to reduce costs might make awarding to the supplier with the higher cost difficult. In this stage of your review, it may be appropriate to negotiate for further cost alignment with this supplier to achieve a final agreement that is beneficial to both buyer and seller.
- Make your decision: Stay with incumbent or try something new? Change is difficult. You may have had a long relationship with your incumbent supplier which had been perceived as a good working relationship. Over time, that supplier may have taken on duties that are outside of the scope of your agreements. Ultimately, as you review the results of your RFQ, this choice will be yours to make. You’ll consider the value of the long term relationship and the value of the known entity against the potential represented by an eager new supplier. Weighing heavily on that decision will be the potential savings. If the new supplier’s cost is 5, 10, or 15% lower than the cost of your incumbent, you’ll have to consider the monetary value you would associate with being able to maintain your current source of supply.
Dave Wenig is a North American Director of Sales at SafeSourcing. Dave or any member of the experienced team at SafeSourcing would be happy to discuss how SafeSourcing can help you attain and quickly realize savings. For more information, please contact SafeSourcing.
We look forward to your comments.