Avoiding Procurement Malpractice: Analysis Drives Strategic Sourcing

In this 3-part series, we’re looking at the procurement disciplines that can help procurement executives and teams design and execute truly effective sourcing strategies in face of whatever the global economy brings.

In the first post, we looked at using spend analysis to gain visibility across enterprise-wide spend as paramount to identifying the opportunities to reduce costs and improve service.

Now we’ll look at the next regimen in the cure: analysis. Armed with the visibility into where the opportunities lie, you can move to using analysis to prioritize needs and execute on a clear plan.

Analysis requires more than just number crunching. To make the most of the information captured requires a mix of content, technology and skills, including:

Data analysis: fully automated spend analysis solutions can help you capture

• Spend aggregation
• Internal price benchmarking
• Variance analysis
• Price trend analysis

Category management: a top-down view that helps you

• Understand all the categories that make up enterprise spend
• Define which categories are critical and what are the best practices for managing category sourcing across the enterprise
• Standardize requirements and processes for managing categories

Supply market expertise: bring the outside in to help:

• Navigate business volatility, complex trading relationships and supplier performance degradation with broader market insight and expertise
• Get a head start on where you can push on requirements and SLAs by measuring supplier performance against market benchmarks

Analysis gives you what you need to make choices, pull the right levers and consistently improve the return on your supply strategies.

In our next installment, we’ll look at process as the way to streamline the execution of the strategy, allowing you to do more – quickly and effectively, even with fewer resources.

Paul Martyn

Want to learn more about how to avoid procurement malpractice? Check out the spend analysis white paper from industry expert Andrew Bartolini and BravoSolution here.

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