http://www.esourcingforum.com/archives/2008/09/30/procurement-under-achievers/ The source of information and best practices in strategic sourcing. Fri, 12 Mar 2010 03:32:03 -0500 http://wordpress.org/?v=2.8.6 hourly 1 http://www.esourcingforum.com/archives/2008/09/30/procurement-under-achievers/comment-page-1/#comment-11301 Joe Patterson Fri, 14 Nov 2008 18:31:34 +0000 http://www.esourcingforum.com/?p=3428#comment-11301 The C-level must to be more engaged in procurement strategy if it is going to deliver cost reductions that shareholders expect. They need to be open to new ways of procuring. One way is to pre-qualify suppliers by putting only those suppliers whose work you like in a bidding pool. The next step is to enter the project specifications into the same electronic/computerized system. The system then automatically matches the project with the supplier(s) capable of doing the work. An invitation to bid goes out to only those supplies in the pool that are qualified to do the work. The bids come back, and the buyer selects the winning supplier. On the surface this may sound familiar, but what makes this different are the benefits. The buyer cuts what it is spending for a customized good or service because the supplier is willing to charge less to fill idle production time. The suppliers of most customized goods and services have at least 30 percent downtime and welcome the work. It is added revenue that improves the supplier's total revenues. Quality and delivery requirements are not compromised because the suppliers have already been pre-qualified. It's a win-win for the buyer and the supplier. This is a tested approach. Currently, companies are saving about 40 percent on what they spend for direct mail, marketing materials, commercial print, labels and product packaging. By filling downtime, printers are improving their annual income from about 3% to 14% and sometimes more. This is all based on a patented methodology held by e-LYNXX Corporation. The C-level must to be more engaged in procurement strategy if it is going to deliver cost reductions that shareholders expect. They need to be open to new ways of procuring. One way is to pre-qualify suppliers by putting only those suppliers whose work you like in a bidding pool. The next step is to enter the project specifications into the same electronic/computerized system. The system then automatically matches the project with the supplier(s) capable of doing the work. An invitation to bid goes out to only those supplies in the pool that are qualified to do the work. The bids come back, and the buyer selects the winning supplier. On the surface this may sound familiar, but what makes this different are the benefits. The buyer cuts what it is spending for a customized good or service because the supplier is willing to charge less to fill idle production time. The suppliers of most customized goods and services have at least 30 percent downtime and welcome the work. It is added revenue that improves the supplier’s total revenues. Quality and delivery requirements are not compromised because the suppliers have already been pre-qualified. It’s a win-win for the buyer and the supplier. This is a tested approach. Currently, companies are saving about 40 percent on what they spend for direct mail, marketing materials, commercial print, labels and product packaging. By filling downtime, printers are improving their annual income from about 3% to 14% and sometimes more. This is all based on a patented methodology held by e-LYNXX Corporation.

]]> http://www.esourcingforum.com/archives/2008/09/30/procurement-under-achievers/comment-page-1/#comment-11279 Paul Gooch, The Logical Group Thu, 02 Oct 2008 07:31:37 +0000 http://www.esourcingforum.com/?p=3428#comment-11279 If you ask a salesman what is one of the key factors in determining whether or not he will be successful, the response will often be "the quality of the Purchasing Manager on the other side of the table". This doesn't mean simply getting the lowest price...rather an agreement which offers a value proposition for both parties. This will include the price:performance ratio, reliabilty of supply, engagement in S&OP processes etc etc. Hence the need to ensure that the commercial and business skills of your Purchasing organisation are as good as your own Sales & Marketing resources. If you ask a salesman what is one of the key factors in determining whether or not he will be successful, the response will often be “the quality of the Purchasing Manager on the other side of the table”. This doesn’t mean simply getting the lowest price…rather an agreement which offers a value proposition for both parties. This will include the price:performance ratio, reliabilty of supply, engagement in S&OP processes etc etc. Hence the need to ensure that the commercial and business skills of your Purchasing organisation are as good as your own Sales & Marketing resources.

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