Category Archives: Optimization
As sourcing organizations mature, it becomes more and more challenging to deliver significant savings across well-sourced categories. However, it has been Paladin Associates’ experience that there continue to be opportunities in both direct and indirect categories. Recently a client engaged Paladin to lead the sourcing process for Flexible Intermediate Bulk Containers (FIBCs). While the process was not unusual, its rigor demonstrated efficiency, effectiveness and the capability to deliver not only savings, but to provide greater understanding of and continuity of … More
Cast a Wider Net Using World Class Bid Gathering and Bid Analysis Tools Optimization is the process of collecting and evaluating supplier proposals to arrive at the best possible sourcing solution that meets all the buyer’s needs. This process reaches out to current and prospective suppliers encouraging all to be creative and innovative. Optimization uses state-of-the art computer based tools that give suppliers an online platform for submitting proposals in a “non-auction” environment and enabling buyers to thoroughly evaluate hundreds … More
It seems that there are still some misunderstandings in the marketplace about the place of reverse auctions in eSourcing. I’ve noticed that several procurement professionals are facing resistance from their internal stakeholders to using eSourcing platforms. This puzzled me, so I decided to put on my detective’s hat. In my investigation, I determined that many procurement professionals: • Use a rigorous sourcing process or “playbook” • Have a common platform that provides a centralized place for everyone to collaborate and gain visibility … More
Today’s post is the second half of Iasta’s interview with Ed Kuyon, Director of Sales Operations for Aeroxchange, as he goes into more detail about PMA parts, finding additional cost savings in the airline industry and future plans for Aeroxchange. The manufacture and sale of aircraft parts is highly regulated, and there are a large number of sole-source suppliers in the industry. Over the past 10 to 15 years, however, PMA parts have gained a wider acceptance in the industry. According to the … More
by Josh Dials, Solutions Consultant Robert A. Rudzki, contributor to the Spend Matters blog, brings up a great point in a recent post. “’Strategic’ is perhaps one of the most overused (and misused) terms in business today,” he says. “Simply adding a few bells and whistles to conventional purchasing and then slapping the word strategic onto the process … is not the same thing as adopting the process as it is intended.” This holds especially true when companies are seduced … More
What if… Actual demand for our product is greater (or less) than forecast-ed? My facilities have different quality standards for the same product? I need to select a “green,” “low-cost country” or “diversity” supplier? My preferred suppliers have capacity or lead-time issues? I have only 10 days to decide the best award for five locations from 10 suppliers, 20 line items and hundreds of bids? A successful sourcing project does not end with an auction; it ends when the awarded … More
2010 should bring a flurry of new acquisitions with many established companies looking to expand product lines and increase growth within the organization. Of these companies looking to expand through acquisition, raising capital expense to fund the newly acquired business unit will be a challenging experience in ramping-up operations with manufacturing and warehousing distribution. Many companies will be looking to outside warehousing and distribution ( 3PL’s ) assistance in order to compensate the need to either add-on to a existing … More
Effectiveness, is key to competing in today’s business environment. Logistics is a process, a supply pipeline which connects you with your vendor/supplier and your customer. Whether you compete domestically or globally competitors, vendors, suppliers and customers are worldwide. The significant cost of logistic/distribution effects the entire supply chain. Logistics importance integrates and develops long-lasting alliance is between the vendors/suppliers and customers. Logistics contributes to a competitive advantage, viewed as a comprehensive process objective, making your product more competitive in the … More
Have you ever considered taking the air or reconfiguring your current packaging? Many companies do not take the time to analyze their current packaging of finished product once the product has been prepared for the end-user. Many times I have walked through distribution warehouse centers and simply picked up a master carton of blister carded product and gave it a real good shake it’s amazing how much wasted space is in that carton. Think about it, air probably makes up … More
More companies are looking at centralized distribution and servicing their customer base in a timely manner in order to control costs, control inventory overhead and to improve overall customer service. Centralized distribution sometimes has its own challenges and issues based on schedules, inventory and transportation network. Other factors that should be considered is the size of the of the distribution center, the layout of the facility and capabilities of handling many more multiple shipments on a daily basis can result … More
By Art Shanfeld, Senior Advisor, TPI Order to Cash (OTC) outsourcing has typically been on CFOs’ lists of “potential outsourcing opportunities,” but it has not risen to the top of the list until recently. TPI is seeing more interest and activity in OTC outsourcing this year in spite of – and possibly because of – the depressed economy. Several emerging trends in OTC are catching CFOs’ attention and changing their priorities on that list of outsourcing opportunities. These are the … More
In Part 1 of this post, I discussed some of the shortcomings to rely on a Proof of Concept as the main decision point to select a particular suppliers Spend Visibility solution. If you decide a POC is required as part of your selection process, below are some suggestions as to how to most effectively conduct the POC as part of your overall selection process. Some “Pros” of Conducting a Spend Data Classification Proof of Concept Allows sourcing people to … More
By John Pirtle, Partner, TPI Outsourcing governance is the business of ensuring that all of the potential value of an outsourcing contract is actually achieved. During our 20 years of helping companies maximize the value of their outsourcing contracts, we have identified these Top 5 observations related to the mission-critical governance function: Outsourcing governance is still maturing, and companies continue to have significant difficulty harvesting the value from their contracts. Outsourcing as an industry is mature, yet clients worldwide are … More
In today’s world of vendor selection for company Spend Analysis needs, the process “du jour” is to have the vendor conduct a free “Proof of Concept” (POC), Pilot, or classification test. Increasingly, this selection process is based on older standards for Spend data classification, and has become an incomplete test of a long term, successful Spend Analysis and larger “Spend Visibility solution” for your company’s Sourcing programs. Classifying data in some manner, which is an important step in ultimately finding … More
What’s a buying/leveraging group? A buying group is a collection of buyers that aggregate their demand into a single ‘account’ and negotiate with a commercial carrier/s for better prices and/or improved services and more importantly a “Known name” in the industry. The group of buyers should be organized around an industry sector or geographic region. How do buying/leveraging groups work? A group is usually formed when an individual or business decides use bulk buying tactics for transportation services. Once a … More
