eSourcing Execution Plans

February 28th, 2008 at 04:56am David Bush - Iasta

There is a very good article on Supply & Demand Chain Exec regarding indirect strategic sourcing. Specifically, the company (Respironics), contracted a very good sourcing advisory firm, Greybeard, to manage some complex categories upfront but ween off the consultants with the lessons learned.

I found this to be an excellent story, because we do the exact same things for many clients.

“in late 2005 Respironics’ procurement team began to ramp up its focus on indirect materials with two goals in mind: putting in place a formal strategic sourcing process for indirects across the company’s U.S. locations and getting greater total value out of its indirect spend. Right away the team confronted two challenges: lack of internal resources and lack of expertise in specific indirect categories.”

Yes, on all fronts!

These are exactly the type of services you should be expecting from your eSourcing provider. We do them and so do many others. The beauty of leveraging the software vendor for this, is their knowledge of the application that will be left behind. Not only are you capturing savings and implementing process, you are also being trained on that process and the specific toolset.

Indirects (especially services) can be some of the more challenging sourcing projects, but also represent large areas of spend. They must be met with a comprehensive plan of action which can be executed and repeated.

Most importantly, think about where you ultimately want to go with an eSourcing app, not just the first 10 reverse auctions. Is there a target savings goal over X months? Is particular category expertise needed? The long standing benefits will come from process improvement and knowledge transfer, when combined with cost reduction.

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Entry Filed under: General, Supply Management Best Practices, e-Sourcing Marketplace