Author Archives: Michael Lamoureux

About Michael Lamoureux

the doctor of sourcing innovation

Ten Common Negotiating Mistakes

Michael Soon Lee posted an article over on on Ten Negotiating Mistakes that Cost You Thousands that deserves to be highlighted. Although it made heavy use of martial arts metaphors, all of the points are simple, important, and easy to understand on their own and we can easily work them into a sourcing framework. 1. Being Afraid To Bargain Do you want to pay full price? Or do you want a deal? It’s up to you, but if you … More

The Seven Scruples of a Sourcing Sensei

A great sourcing department is led by a great sourcing leader – but what does a sourcing leader do that sets her apart from everyone else? Simply put, to earn her place at the top, she astricts. More specifically, great sourcing leaders analyze, strategize, believe in team recognition, innovate, focus on compliance, use technology, and always have an eye out for sustainability. More specifically: Analysis A sourcing leader understands the importance of analysis and carefully analyzes the situation before making … More

Best Practice Freight Bidding

Industry week previously ran a good article by Chris Ferrell of Tompkins Associates on Best Practices in Freight Bidding that had a number of good suggesstions. The article offered up the following 12 best practices: Obtain commitment from executive management. This is always a good idea, no matter what project you are undertaking. Benchmark current freight costs. Also, separate out fuel surcharges from basic freight spend. This is critical. After all, how can you do better if you don’t even … More

Seven Risk Mitigation Strategies You Can Do With Optimization

Optimization can not only be used to reduce cost, but it can also be used to reduce risk. In this post I’m going to overview how you can effectively support seven common risk mitigation strategies in a proper strategic sourcing decision optimization solution (including the solution offered by Iasta, if you’re wondering). Capacity Assurance You can create exclusion constraints that restrict supply to suppliers with a minimum amount of capacity to insure that the suppliers can handle the award they … More

Strategic Services Sourcing II

In our last post, I reminded you about Strategic Service Management and the complexities thereof, as well as about Strategic Service Parts Management and Strategic Workforce Management in my efforts to give you an answer to when do I source that?. Now that you know when you should be considering strategic services management and when it enters into your sourcing projects, let’s move on to the question that first comes to mind, how do I source that?. The first thing … More

Strategic Services Sourcing I

This two part post originally appeared last summer, but I thought would be good to review, as we just saw a Fortune 50 client auction, with 74% reduction in strategic IT services, last week – David Bush. You’ve probably been following my posts over on Sourcing Innovation on Strategic Service Management and the complexities thereof, as well as my pieces on Strategic Service Parts Management and Strategic Workforce Management and, by now, you’re probably wondering, how do I source that? … More

10 Tips for Talent Retention

A study by McKinsey & Company and the Supply Management Institute found that high performing firms have high performing purchasing departments, that what matters most is the people in the purchasing department, and that purchasing departments staffed with talented, motivated, and interactional personnel achieve, on average, savings that is two-and-a-half times higher than their peers who haven’t yet figured out that when it comes to supply chain, People Matter Most. Therefore, should you be so lucky as to acquire exceptional … More

9 Steps to e-Procurement Success

e-Procurement is the counterpart to e-Sourcing, starting where e-Sourcing ends and ending where e-Sourcing begins. It is the “e” implementation of the procurement cycle which is concerned with the requisitioning, receiving, and reconciliation of the received goods as opposed to the analysis, auction, and award that takes place in the sourcing cycle. It is essentially the automation of the non-strategic and transactional activities that consume the majority of a buyer’s time, but one that comes with increased enterprise level visibility … More

Is it Center of Excellence or Mindset of Excellence?

The Supply Chain Management Review recently ran an article on Maximizing e-Sourcing through a Center of Excellence where they noted that software alone is not sufficient — organizations must have the knowledge and policies in place to support these tools. The article then says that, because of this, leaders today are establishing Centers of Excellence (CoE) to fully capture the value and savings from e-Sourcing technologies. As per the article, a Center of Excellence is a small center-led group of … More

5 Ways to Take Your Sourcing to the Next Level

Design for Sourcing Successful innovation designs for sourcing. Waiting until the prototype phase, after engineers have made material and component choices, increases the chances that all designed-in-costs will be locked in. Considering that the Defense Advanced Research Projects Agency (DARPA) estimates these costs to be, on average, 80% of product costs, this is significant. Furthermore, failure to involve procurement early could risk increased direct material costs, unacceptable risk in supply, unexpected component obsolescence, missed regulatory compliance, the inability to expand … More

Devising an RFP That Works

A generally accepted (and obvious) “best practice” is to procure services via a robust competitive methodology. In general, this is achieved by issuing a comprehensive request for proposal (RFP) to each of the potential vendors for that service. The practice has now become so common that many organizations have developed a standardized template (or templates) and are able to rapidly churn out RFPs to meet the demands of its business unit customers. This semi-automated approach accelerates the overall procurement timeframe … More

Applications of Spend Analysis

This post originally appeared on ESF on Sept 11, 2007 Spend analysis is the process of aggregating, classifying, and leveraging spend data for the purpose of gaining visibility into cost reduction, performance improvement, and contract compliance opportunities. It is part of an overall spend management and visibility process that includes the analysis, award, and monitoring of corporate spend. Additionally, it is the first and last step of the strategic sourcing process that drives total value. But it’s more than determining … More

Two-Way Scorecarding Best Practices

A basic two-way scorecard is a scorecard that allows a supplier to provide feedback on how well a buyer is providing it with information, paying on time, and managing other key elements of bilateral performance. It is designed to ensure that there is a two-way flow of information, and feedback, regarding the service that the supplier is expected to perform on behalf of the buyer. A more advanced two-way scorecard measures supplier and buyer results across a balanced set of … More

Being Green Should Be Easy

Green Purchasing, also known as Environmentally Preferable Purchasing (EPP) is important, and not just because we’d need the resources of five (5) earths to sustain us if everyone in the world consumed like the developed world did (and the US, Australia, and Canada in particular). It’s important because purchasers, be they government, corporate, or institutional, yield a great influence over the future of the planet with every buying decision they make – and because every purchase has a hidden cost … More

The Negawatt, Sustainable Energy, and Ethanol

A recent Economist article reminded us that energy efficiency, according to the McKinsey Global Institute, could get us halfway to the goal of keeping the concentration of greenhouse gases below 550 ppm. Considering that energy efficiency lowers fuel bills in addition to energy needs, the quest for “negawatts” is a valid one. Moreover, even though a lot of investment would need to be made to increase energy efficiency to the levels that are possible, on the order of 170B annually … More