Year after year companies are in a constant battle to control prices and boost margins. The fear of losing traffic is kicking stores into high gear to find ways to cut costs while maintaining quality, improving efficiencies, and saving millions--without increasing staff.
E-sourcing isn’t new – yet organizations that do employ strategic sourcing have struggled to implement an initiative that has real, lasting impact. In this article we reveal the secrets of e-sourcing success.
The keys to implementing, socializing, and managing an organization-wide sourcing strategy:
Get out there. Go beyond scheduling meetings – chat with stakeholders in the hallway, at their desk, don’t wait for the opportunities to find you.
- Establish an e-auction expert
- Provide a central point of contact between stakeholders, vendors, and e-sourcing solution provider
- Build relationships
- Show that you’ve got senior management support behind the program
Take it one step further. Create a culture where e-sourcing is a part of the procurement process, rather than an afterthought or a tool to only be used for copy paper and shopping bags.
- Formulate goals based on results from the previous year (a percentage increase in spend volume e-soured, for example), and timelines for the coming year
- E-Auction savings are budgeted
- All capital expenditures require Procurement sign off
- Large expense items are all reviewed
Break through fears and preconceived notions about e-sourcing. Regular communication about why e-sourcing makes the entire sourcing process easier and saves time for the spend owner will pay off.
- Go over past year’s results, what works and doesn’t work, similar events that have run before
- Anticipate and address the questions people may be too afraid to ask.
- Develop usable and consistent reports
- Discuss “what if” savings scenarios
- Schedule time with the leaders of each business area to review opportunities and results
Leverage Your Resources
Understand all of the tools and services available through your e-sourcing provider. They may be willing to assist in ways beyond what’s printed on their marketing materials. Don’t be shy about asking for help.
- Your e-sourcing provider may schedule on-site meetings with buyers to assist in selecting categories that have greater potential for e-sourcing success - as well as steer clear of those that aren’t good candidates
- Create tools that make e-sourcing simple for buyers like an auction feasibility checklist, a reverse auction setup checklist, frequently asked questions, and so on
Be a Change Agent
One of the most difficult things about creating a successful e-sourcing program is getting people to step out of their conform zone. No easy task. But over time, you can convince them it’s worth the risk.
- Distribute e-sourcing results leaders within your organization, as well as all spend owners
- Create a bulletin board in a high-visibility area that showcases savings
- Highlight benefits other than savings and stress that price does not dictate which supplier wins the business
Find the spend and be persistent
E-sourcing pros continually challenge the status quo and run e-sourcing events for categories that have never been done before. Don’t put too many limits on the types of categories you’ll consider.
- Look at higher spend categories first, but don’t rule a category out based on total spend - small wins can really add up in the long run
- Two will work, but a category with at least three, trustworthy suppliers provide the best results
- Look for categories where pricing is going down to take advantage of cost decreases
- Find categories where pricing is increasing to achieve cost avoidance
- Explore non-traditional categories with your sourcing provider - even if you have doubts about whether a category is a good candidate
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