Daily Archives: December 19, 2006

On the Seventh Day of X-Mas (Sourcing Strategies)

On the seventh day of X-Mas
my blogger gave to me
strategies for winning,
tactics for saving,
five golden rings,
four little words,
tri-focal lens,
two boxing gloves,
and a lesson in strategy.

Seven strategies you can use to increase your sourcing success are:

  • Spend Visibility
  • Supplier Performance Monitoring
  • Smart Country Sourcing
  • Collaboration with Strategic Partners
  • Innovation on Demand
  • Empowerment
  • E-Procurement

Spend Visibility

It’s not how much you spend, how you store it, how you cube it, or how you report on it – it’s how much you get, how you profit from it, and how you improve on it. It’s all about value, profit, and continual improvement. (Spend Matters Not) And that requires visibility – otherwise, you don’t know what you’re getting, whether you’re profiting from it, and what you need to be improving on.

Supplier Performance Monitoring

Supplier Performance Management (SPM) is a business practice that is used to measure, analyze, and manage the performance of an organization’s performance in an effort to cut costs, alleviate risks, and drive continuous improvement. The ultimate intent is to identify potential issues and their root causes so that they can be resolved to everyone’s benefit as early as possible. It’s critical because Aberdeen has found that companies with formal performance measurement programs are able to improve supplier performance by 27% and that enterprises that share performance data with suppliers generate 61% greater improvements in supplier performance than enterprises that withhold this data. For more information, refer back to my three-part summer series over on eSourcingForum (I, II, and III)

Smart Country Sourcing

Low cost country sourcing is good, but smart country sourcing is better. It’s all about being able to move quickly, as Jason points out over on Spend Matters.

Collaboration with Strategic Partners

Remember, two heads are better than one.

Innovation on Demand

A methodology to solve your tough problems. See my earlier post.


Real empowerment, not just lip service.


Without eProcurement, you could find yourself buried in a stack of paperwork. Although the real savings come from sourcing, without a good e-procurement system, you will find yourself spending too much time tracking purchase orders, shipments, and payments. Considering that the bulk of your savings will come from strategic activities and not tactical ones, make sure you have a good eProcurement system.