Daily Archives: December 19, 2008

On the Seventh Day of X-Mas … (Strategic Sourcing Success 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
  • End-to-End 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. (Remember, Spend Matters Not.) It’s all about value, profit, and continual improvement. 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 companies with formal performance measurement programs greatly improve supplier performance across the board. Consider the recent Canada Post case study which found supplier improvements across the board, even in a public sector organization where past performance can’t be used to disqualify future bids in public competitions.
For more information on supplier performance management, see the wiki-paper.

Smart Country Sourcing

It’s not low cost, best cost, or near cost – it’s smart cost country sourcing, which includes home cost country sourcing whenever there is a justifiable value proposition to doing so. Don’t go half-way around the world for something you can get down the street when a single fluctuation in raw material costs, transportation costs, or exchange rates can wipe out a year’s worth of savings and lead to significant losses in the long term.

Collaboration with Strategic Partners

Remember, Collaborate, Collaborate, Collaborate, Collaborate (I, II, III, IV, and V) because two heads are better than one.

Innovation on Demand

Innovation-on-Demand, as summarized in my post on e-Sourcing Forum, is a great way to increase your sourcing success. Enable it by way of collaborative PLM technologies that integrate design-centric technologies like those offered by Akoya, Apriori, and Co-exprise.


And I mean real empowerment, not just lip service. If you’ve focussed on hiring real talent with real EQ, you’ll do better letting them take the initiative than limiting them to only that which you know.

End-to-End E-Procurement

End-to-End e-Procurement, the implementation of e-Procurement technologies that support each step of the various procurement cycles of your organization in a tightly integrated fashion, enables the benefits that early procurement technologies promised, but never delivered, which include:

  • elimination of invoice overpayments
  • transparent organizational costs
  • regulatory compliance
  • increased visibility into supplier performance
  • significantly reduced maverick spending

and 15 more! So, if you haven’t already, download the jointly-authored Sourcing Innovation Whitepaper today!