Sourcing Capability Analysis
Our objective is to enable a business to source competitively in any economic environment by increasing an organization’s sourcing capability. We will examine your source to contract methodology (S2C) which includes: What is being sourced, how it is sourced and from whom it is being sourced while managing supplier, supply chain risk and supplier performance expectations. After an in depth review we would provide a gap analysis, and depending on the type of business we would either use a light touch or a deep dive approach.
Organize all the Enterprise agreements at the parent business level without disruption to division level activity - these would be indirect categories such as Travel, Utilities, MRO, Freight costs and logistics network, IT(hardware and software), Leases, Consultants and other professional services.
Do a deeper dive into strategic category spend /supplier performance and build the capability wherein the business can launch their own sourcing /supplier development event, using their resources but with our facilitation and guidance and if needed: templates, market analysis, negotiation training, contract management guidelines.
Recommendations will depend on the organizational maturity and the amount of spend currently under management (best in class runs around 85%). Analysis will include: how much of the activity is transactional vs tactical; the level of information flow automation and the level of spend visibility across the enterprise; if there is an established management operating system that guides their behavior and action; are there signals that highlight abnormalities in material flow and can they anticipate and mitigate risk?
The goal is to help build organization strength through action learning, using actual sourcing events to develop skills and experience while save costs in the meantime
Our Paths to success
- Market and supplier Economics: Don’t be afraid to create tension with your suppliers, even if they are strategic partners. “Tension creates focus, tests boundaries and forces people to think differently.” How do your costs compare to industry/market indexes? How is supplier and supply risk being identified and managed?
- Robust spend analysis: Find the two or three “super strategic” categories fundamental to the competitiveness or operation of your business and become “the expert” on negotiating those categories.
- Supplier relations management: Never assume the potential for savings or value creation in your big categories is exhausted. “If it looks that way then change something and disrupt the current sourcing model, contract cycle or negotiation format.” Use ‘should cost’ methodology to determine fair market price.
- Team capability: Boost your team’s negotiation skills. This is the single biggest and fastest path to improved results, driving your team’s motivation and building their credibility.
- Contract Management: When you’ve made a deal, make sure its value is delivered. “This means having the discipline to follow through and hold both sides to what was agreed.” Are contract renewals always re-negotiated?
- Options: Understand where the team is at and offer a menu of capability building or straight away sourcing events to facilitate a cost savings opportunity and long term imporvement.
We'll meet your team where they are at and offer a menu of capability building or straight away sourcing events to facilitate a cost savings opportunity and long term improvement.
Contact us directly for more information or call us toll free at 844-264-2357 to schedule your Sourcing Capability Analysis.