E-Sourcing Forum » No pain, no gain

No pain, no gain

January 26th, 2007 at 06:57am David Bush - Iasta

Well, not really. According to Supply Chain Digest, which recently ranked its top 10 technologies and strategies for supply chain management, many aspects of eSourcing scored quite well. Drum roll please…among the highlights:

#1 eAuctions (1 Band-Aid and 5 $$$, an almost perfect score)

What: Use of technology tools to drive on-line contract bidding for a growing array of both indirect and indirect materials. Suppliers are first “qualified,” and then an on-line event (sometimes called a “reverse auction” because the bidders are hoping to sell, not buy) takes place in which the qualified suppliers bid against each other for the business.

Why: The scope of goods and services successfully being procured through e-auctions continues to grow. Once mostly limited to indirect goods, companies such as Hallmark and Rubbermaid have enormously expanded the reach of these tools into direct (production) materials, services and virtually anything that can be procured.

Pain: Relatively low, once buyers get their heads around the new approach.

Gain: Savings of up to 30% on purchased goods and services as a result of the auction process is not uncommon. Just think about it – why wouldn’t this work?

#3 Spend Management Visibility (3 Band-Aids and 5 $$$)

Huge financial benefits are virtually guaranteed but there is significant financial investment, change management, IT resources and time needed for success.

#8 Strategic/Global Sourcing (3 Band-Aids and 4 $$$)

What: Use of a more integrated, consolidated approach to supplier selection and procurement, including evaluating total supply chain costs, and consolidating purchasing power. Rapidly, strategic sourcing is also tightly tied to offshoring and global sourcing strategies. We probably could have moved this up on the list, but the opportunities vary dramatically company to company.

Why: Many companies have saved many millions through a more strategic approach to procurement. Global sourcing is becoming a nearly ubiquitous strategy, though for many the gains haven’t fully materialized. Still, as we’ve written, to succeed as a company today, when it comes to the global supply chain, you better be good.

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Entry Filed under: General, Reverse Auctions, Spend Analysis, Supply Management Best Practices, Technology / SaaS

1 Comment Add your own

1. Top 10 Supply Chain strat&hellip | January 26th, 2007 at 8:53 am

[...] Thanks to David Bush and his post no pain, no gain…not really, I’ve discovered a GREAT top 10 report issued by SupplyChainDigest: The Top 10 Supply Chain and Logistics Technologies and Strategies for 2007: “Published in 2007, this is the first annual list of the top supply chain and logistics technologies and strategies for the coming year. The list, from number 1 to number 10, was based primarily on an assessment of the relative “pain to gain” ratios that most companies seem to experience when pursuing each category.” [...]

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