Savings Strategy Development, A Review Part I

Last weekend I audited the online course Savings Strategy Development from Next Level Purchasing, a course designed to introduce you to best practices that you can use to craft a top-notch savings strategy.

According to NLP‘s website, this course is designed to help you learn a systematic method of establishing a cost savings strategy in your organization. In addition, you will learn how to identify sourcing and savings opportunities by analyzing your spend, plus…

  • How to define several types of savings and avoidances
  • How to create or improve a commodity classification system that optimally supports sourcing and savings initiatives
  • How to find and take advantage of easy cost savings opportunities
  • How to achieve cost savings by leveraging existing supplier relationships
  • How to negotiate savings without straining a supplier relationship
  • How to diligently manage costs by utilizing the Producers Price Index and developing your own Supplier Price Index
  • How to get everyone to apply the same, proven approach to cost savings by implementing The Ten Phase Approach To World-Class Sourcing
  • How to track the progress of your sourcing strategy
  • How to determine a methodology and strategy when writing an RFP
  • How to write an RFP that is aligned with the final contract
  • How to write an RFP that achieves the perfect balance of standardization and customization
  • How to write an RFP that is aligned with evaluation scorecards
  • How to write an RFP that ensures equitable (“apples-to-apples”) supplier comparisons
  • How to write an RFP with an optimized supplier response format
  • How to report cost savings in a way that will be embraced by executive management

Like the last course I reviewed, it also lived up to its promises. In addition, it also:

  • clearly differentiated savings, avoidances, and false savings to help you report your achievements in a clear, correct, and effective manner
  • provided easy methods you can use to determine your bottom line impact on your organization’s income statement
  • detailed formulas you can use to precisely calculate your hard dollar savings and cost avoidances
  • outlined the seven core components of any good savings strategy
  • provided a simple introduction to basic spend analysis
  • clearly documented all of the groundwork that needs to be done at the start of any successful sourcing effort
  • offered sound advice on how to avoid bottlenecks that can hinder your efforts and prevent you from reaching your goal quickly and efficiently
  • identified different types of savings opportunities that can result from collaboration
  • offered sound techniques for effective negotiations
  • described techniques for an effective market survey, a critical step before RFX distribution

So, is this course also worth it? Absolutely. Not only would it take you days to attempt to amalgamate all of the content you would need to match this course, and weeks to extract and absorb the relative material, but it could take you (significantly) longer still to put together an equivalent ten phase approach that could be as successful as the one outlined in this course. (And, like the last course, it is another step in the completion of the certificate program that is likely to lead to a salary bump that is multiples of what you invest.)