Is your organization trying to cut costs? Are you focusing more on strategic sourcing and procurement best practices? Here is a tale of how best to approach and NOT approach this endeavor.
“What happened to the coffee?” One of the few delighters left in some companies is the offerings in the break room. While this can often be a savings opportunity and a tempting sourcing project, it may do more to damage your efforts than promote them.
When establishing a new strategic sourcing function, it is common to start with the “easy” spend areas, areas that aren’t closely held by business units. However, it can also set the tone for how the organization sees you. If you too closely align yourself with office products and pantry supplies, you may be seen as a group that “buys our post it notes”. So if these traditional areas aren’t optimal, where should you start?
- Use commodity areas, yes even office supplies, as a way to build a path of success and partner with the organization. However, sourcing or procurement should not own any categories. Have someone in the business take ownership and provide the guidance and market expertise that you want your sourcing organization to become known for.
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Identify upcoming initiatives that will require sourcing new suppliers. Areas that do not have an entrenched incumbent, where there is limited internal history of buying or where spend is significantly increasing can provide a perfect opportunity to show the value of a sourcing process. High visibility projects can also help raise the profile among senior
management . -
Don’t ignore non-traditional sourcing areas. Areas that tend to be ignored can provide the greatest savings, sometimes from a very sympathetic party. Take
HR services for example. This area is generally not sought after. But they (HR) have the same challenges in sourcing employees (the recruiting process) as you have in sourcing suppliers (the sourcing process). Draw parallels to your goals and become allies to show them how you can be of benefit them.
And remember, unless you intend to bring in a corporate barista, perhaps by diverting some savings from other projects to fund, Don’t Touch the Coffee.
For more best practices, visit our site http://www.roundedthird.com , a consultancy focused on supporting CEOs and CFOs of growing companies to Spend Smarter and Grow Smarter through best practice sourcing and procurement practices.
