Daily Archives: April 11, 2009

Do More With Less in Procurement

“Do More With Less” is the new mantra of businesses who are slashing budgets and, unwisely, slashing head counts. It’s a darned good thing it’s not a new mantra for procurement who has always been trying to “Get More From Less”, and do so with too few resources. That’s why I enjoyed a recent article in the Spring Edition of the CPO Agenda by Nick Martindale who outlined eight strategies being used by companies that really are doing more with less. These strategies, and others like them, will not only help you survive the downturn, but position your procurement department to be the organizational leader of tomorrow.

  1. Prioritize Workloads
    Understand where your finite resources will deliver the most bang for the buck and focus on those endeavors. Don’t oil the squeaky wheel … if it gets too loud, simply replace it. Focus on strategic sourcing projects and lean supply chain transformations that will reduce cost, improve efficiency, and take the waste out of your processes. That’s where the savings lie.
  2. Increase Productivity
    Eliminate redundant activities. Streamline sign-offs and processes. And, most importantly, don’t put off the acquisition of new systems. With pay-as-you go SaaS systems, you’ll save more than the small monthly fee you have to spend on them. Stop thinking about it. It’s a no-brainer decision.
  3. Refocus Strategic Initiatives
    Strategic initiatives are more important than ever, but the reality is that you can’t wait five years for payback, especially when there are strategic activities you can take now that start realizing payback next quarter. Start with those, and work your way up.
  4. Use Technology to its Fullest
    A real spend analysis system will allow you to slice and dice the data anyway you want, exposing opportunities you wouldn’t find otherwise. If you need to bring in an expert to do this, do so. Most consultants, who will work on a results-basis, can save you millions with these kinds of tools. Use them!
  5. Shoot the Mavericks
    Or at least prevent them from buying off of contract. Force all buys to go through an e-Procurement system that only allows orders against the contract without approval from a senior manager (for exceptional circumstances only).
  6. Reassess Spend Priorities
    Your best sourcing opportunities six months ago are not necessarily your best sourcing opportunities today. Every time you finish a project, reassess the next set of projects in the queue before you begin. There might be a new opportunity in the marketplace worth re-prioritizing your queue for.
  7. Use External Expertise
    You don’t know everything, and with a staff who can barely keep up with their increased workloads thanks to hiring freezes, you don’t have time to figure it out. Bringing in an expert will help you identify numerous opportunities that you’d otherwise miss.
  8. Outsource Non-Critical Activities
    Sometimes a third party really can do it better. And sometimes the quick-hit savings you’ll get from a GPO, while not necessarily the best possible, will be very significant to you, especially since you’ll get savings AND free up your staff to focus on core categories where they expertise will allow you to identify even more savings.