As C - Suite Professionals, do your business resolutions align with you exceeding your annual business plans?
Here are ten (10) procurement focused resolutions that may align with your plan. While they may seem straight forward, the fact is in many cases companies do not focus on these even within more broad based annual business plans.
Here is a typical Example: Your company has new store construction planned for this year. You have suppliers for all your construction needs and materials including signage, lighting, checkouts, floor tile, ceiling tile, loss prevention equipment, technology, electrical engineering, plumbing, doors, environmental systems, freezer cases, shelving, kitchen equipment etc.. I could go on and on. As this is a new location there is a budget for this build and it is part of your capital plan. You have bids in place and are focused on getting the location open and delivering revenue.
Here is the question, have you checked to make sure that your pricing is as low as it should be, or are you just going with your internal teams RFP evaluations? If you are, you are not doing your capital plan justice.
- Reduce the Capital Plan through improved pricing.
- Reduce Cost of Goods and Services through improved quality and pricing.
- Reduce you Expense Plan through improved service and pricing.
- Use external sources and tools to help your procurement team achieve maximum results.
- Do not hire any more people for your procurement team unless they are a replacement.
- Always ask all functional departments if current purchases have been taken through a price compression exercise with at least three (3) suppliers. Not Contract review, price compression.
- Make sure that all contracts contain statement of work procedure outlines with specific out-of-scope price submission language
- Make sure that your internal teams have a well-defined sourcing execution plan.
- Identify additional sources of supply to mitigate risk of out of service or out of stock situations.
- Eliminate all Rogue spending.
While these seem simple, all CPO’s, CFO’s and other executives will tell you they have this covered. Unfortunately, in most cases they do not.
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