Today’s post is by Mark Davis; Vice President of Operations and CTO at SafeSourcing

For many companies the journey to begin a project to source products or services begins with determining what they know about what they are about to purchase.  Many times when the product is one they have purchased previously, the task is simple and the details are readily available.  

In other cases, when new products are being purchased, or when many parts of the business are purchasing the same product but from different vendors or with different agreements, this beginning process can be much more difficult.  

Enter surveys…..Surveys are a useful tool to quickly and easily gain the additional information you need in order to begin a difficult sourcing effort.  Whether internal or external, today’s blog will focus on how you can use them to find the missing pieces of information you may need.

What are we doing? – When large companies have offices in more than one location, many times there are items which are purchased by the remote locations directly.  The obvious problem with this scenario is that the organization is not able to leverage the combined purchasing power it has.  In order to do this, however, how the company is currently doing things must be known.  Running a simple internal survey will allow the company to ask their locations or offices what they are purchasing, how much they are purchasing and for what price.  With this survey you should also determine who the company is working with and, if they are under contract, what the length and terms of that contract are. 

What should we be doing?  – The other useful aspect of internal surveys is to gather information from the offices on what the company “should” be doing.  Asking simple questions about what the location would like to do, or what isn’t working for their current agreement could provide valuable information about the type of vendor you want to look at as well as what types of products and/or services you should be moving with.

Poll your vendors – One area of information that can provide great detail but that some companies never tap into is their own vendors and partners.  Particularly in situations where many vendors are providing the same service you can often get a greater level of detail of what they are providing than you can through an internal search.  The hardest part for many companies is to get past the pride of, as a company, admitting that you don’t have the detail readily available.  Most vendors will not have a problem getting this information and as an added benefit you will get a chance to find out which vendors are willing to work with you during this process so that you can decide who will get the opportunity to win your business.

For more information on running surveys to gather information for your procurement team, please contact a SafeSourcing Customer Service Representative.  

We look forward to your comments.

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.

Event Selection:

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!

We look forward to and appreciate your comments.

One of the biggest causes of excessive cost we find is evergreen contracts. I find this to be a fitting topic for a New Year discussion as, just like the New Year, these contracts also follow on the tails of a year. Evergreening is the practice in which a contract automatically renews if no actions are taken. Often this renewal is at a premium. For more on evergreening, click here to go to the SafeSourcing Wiki.

Evergreening can be prevented using a two part approach. First, you may implement a contract management system that will monitor your existing contracts and notify you of upcoming dates, such as contract expirations. These notifications will allow you to take the appropriate actions to prevent evergreening.

Once you have received your notification, you can take the existing documentation from the contract management system and work with your strategic sourcing partner to develop this into an RFI, RFP or RFQ based on the specific needs of that project. This chain reaction caused by your contract management system will have allowed you to prevent your evergreen contract from automatically renewing, led to further procurement savings and did so with enough time to benefit from this process without interrupting your current source of supply.

In tomorrow?s post, we will consider tips that will help you stay the course with your resolutions.

We look forward to and appreciate your comments.

One of the biggest causes of excessive cost we find is evergreen contracts. I find this to be a fitting topic for a New Year discussion as, just like the New Year, these contracts also follow on the tails of a year. Evergreening is the practice in which a contract automatically renews if no actions are taken. Often this renewal is at a premium. For more on evergreening, click here to go to the SafeSourcing Wiki.

Evergreening can be prevented using a two part approach. First, you may implement a contract management system that will monitor your existing contracts and notify you of upcoming dates, such as contract expirations. These notifications will allow you to take the appropriate actions to prevent evergreening.

Once you have received your notification, you can take the existing documentation from the contract management system and work with your strategic sourcing partner to develop this into an RFI, RFP or RFQ based on the specific needs of that project. This chain reaction caused by your contract management system will have allowed you to prevent your evergreen contract from automatically renewing, led to further procurement savings and did so with enough time to benefit from this process without interrupting your current source of supply.

In tomorrow’s post, we will consider tips that will help you stay the course with your resolutions.

We look forward to and appreciate your comments.

In yesterday’s post, we took a look at a fairly basic concept that will pay out enormous dividends. In a nutshell, every procurement activity, regardless of value, should be approached using the same techniques that would be used for the highest priority purchasing initiatives. This includes RFIs, RFPs and RFQs. Now, the question becomes, how do you prepare your team for the challenges that lay ahead?

The answer is to develop a thorough plan. Working with your strategic sourcing partner, develop a strategy based on a proper category discovery session. Your partner will lead the effort to determine your plan based on the spend information that you provide and conversations with key personnel in your departments. Once this plan is in place, understand that this will become a living document that will continue to grow and evolve throughout the year.

In addition to your plan, you also need to enable your team and your strategic sourcing partner. Your partner has already assisted with the discovery process, so it is a natural extension to continue to keep them informed of changes to your plan. Now that you will be considering more of your company’s spend in your day-to-day efforts, your solution provider will also have to follow suit and provide additional support. At this point, you must develop and maintain an open line of communication between key players on each team.

Finally, you will want to prepare to share the good news. In order to keep your team motivated through the year, you might consider how best to share the news of your successes. You may choose monthly or quarterly reporting that will highlight cumulative savings dollars that departments or team members have ushered in using your procurement plan. Creating excitement will only lead to more success.

Tomorrow, we will touch on another resolution that is becoming more and more common and from which we can all benefit.

We look forward to and appreciate your comments.

In yesterday’s post, we took a look at a fairly basic concept that will pay out enormous dividends. In a nutshell, every procurement activity, regardless of value, should be approached using the same techniques that would be used for the highest priority purchasing initiatives. This includes RFIs, RFPs and RFQs. Now, the question becomes, how do you prepare your team for the challenges that lay ahead?

The answer is to develop a thorough plan. Working with your strategic sourcing partner, develop a strategy based on a proper category discovery session. Your partner will lead the effort to determine your plan based on the spend information that you provide and conversations with key personnel in your departments. Once this plan is in place, understand that this will become a living document that will continue to grow and evolve throughout the year.

In addition to your plan, you also need to enable your team and your strategic sourcing partner. Your partner has already assisted with the discovery process, so it is a natural extension to continue to keep them informed of changes to your plan. Now that you will be considering more of your company’s spend in your day-to-day efforts, your solution provider will also have to follow suit and provide additional support. At this point, you must develop and maintain an open line of communication between key players on each team.

Finally, you will want to prepare to share the good news. In order to keep your team motivated through the year, you might consider how best to share the news of your successes. You may choose monthly or quarterly reporting that will highlight cumulative savings dollars that departments or team members have ushered in using your procurement plan. Creating excitement will only lead to more success.

Tomorrow, we will touch on another resolution that is becoming more and more common and from which we can all benefit.

We look forward to and appreciate your comments.