{"id":3422,"date":"2015-03-26T18:11:37","date_gmt":"2015-03-26T18:11:37","guid":{"rendered":"https:\/\/www.certitrek.com\/nlpa\/2015\/03\/26\/sweet-16-procurement-tips-especially-6\/"},"modified":"2021-07-14T08:25:30","modified_gmt":"2021-07-14T12:25:30","slug":"sweet-16-procurement-tips","status":"publish","type":"post","link":"https:\/\/www.certitrek.com\/nlpa\/blog\/sweet-16-procurement-tips\/","title":{"rendered":"Sweet 16 Procurement Tips (Especially #6)"},"content":{"rendered":"

Welcome back! \u00a0After a thrilling round of\u00a0March Madness: 64 Slam Dunk Procurement Tips, we are down to our Sweet 16 procurement tips from our global purchasing experts. \u00a0The competition is getting tougher (especially #6), so let\u2019s get started!<\/p>\n

Don\u2019t miss updates on Procurement & Supply Chain, Subscribe here!<\/p>\n

Collaborative Procurement<\/h2>\n

1.\u00a0 The ideal sourcing situation for an organization happens when a cross-functional team collaborates on all aspects of a sourcing project. This includes the procurement department being involved in early stages of a project, such as specification writing or product design. And it also includes internal departments being given a voice in supplier selection decisions. Benefit: Cost, delivery, quality, service, and source flexibility objectives are balanced rather than one being sacrificed for another.<\/p>\n

2.\u00a0 Most procurement departments have a mission like \u201cacquire the best quality goods and services at the lowest cost.\u201d But more advanced procurement departments make collaborating with suppliers on process improvements and innovative business ideas an equally high priority. Benefit: A competitive advantage in the market.<\/p>\n

3.\u00a0 Though usually orchestrated by senior management, procurement departments can often find opportunities to collaborate on socially responsible initiatives with mission-driven organizations, such as those who seek to reduce animal cruelty or increase the use of locally sourced products. Benefit: more recognition for the organization as a \u201cgood citizen.\u201d
\nNext Level Purchasing Association<\/strong><\/p><\/blockquote>\n

4.\u00a0 The best advice I\u2019ve heard is to listen. Listen to your team, your suppliers, your managers. They all have good, valuable ideas and they will keep the function moving forward.
\nTim Burt | Deputy Editor | Procurement Leaders Magazine |\u00a0@tburt85<\/strong><\/p>\n

5.\u00a0 During the sourcing process, don\u2019t be hasty to award an order or a purchase contract until you have conducted a thorough, apples-to-apples review of the total landed cost for components or total cost of ownership for equipment. An offer that looks too good to be true usually is. Take the time to analyze payment terms, freight terms, warranty period, scheduled and unscheduled maintenance costs, training, scrap value, disposal costs, and implementation costs, in addition to price. It\u2019s best to compare all the components of cost side-by-side in a detailed matrix.
\nJason Holliman, SPSM | Nordex USA, Inc.<\/strong><\/p>\n

Procurement Technology<\/h2>\n

6.\u00a0 For me, my discussions and corresponding interviews with Karen Evans, the former CIO for the U.S. Federal Government was powerful, in that it confirmed a position I have held since the late 90s . . . that technology in and of itself is largely irrelevant and ineffectual \u2013 at least in the traditional sense.<\/p>\n

In fact in a July 13th, 2010 post titled \u201cCalculating Digital Capital and what it Means to Traditional ERP Vendors\u201d, I wrote the following:<\/p>\n

In the just released white paper titled \u201cTransparency in Government Procurement\u201d Karen Evans the former CIO for the U.S. Federal Government under the Bush Administration hit the proverbial nail on the head when she made the statement that \u201cproducts\u201d (re technology), does \u201cnot replace skill sets,\u201d and that \u201cvendors have to change their business models\u201d focusing on the critical areas of \u201cquality of service and reliability of data.\u201d<\/em><\/p>\n

Evans went on to suggest that this \u201cchange\u201d is \u201cdifferent from selling an Oracle data base,\u201d even if it is within the realms of a virtualized or \u201ccloud computing\u201d architecture, and that computing in the clouds is really just \u201coptimizing the use of infrastructure\u201d and is therefore a commodity versus being an actual service.<\/em><\/p>\n

This entire post is quite revealing and worth reading today, especially given that it was at a very interesting point in time when the wave of change we are now experiencing was just beginning to create notable ripples.<\/p>\n

It was a time when the industry first started to acknowledge that the 2000 SIIA white paper \u201cStrategic Backgrounder: Software As A Service\u201d actually existed, let alone that \u201cpackaged desktop and enterprise applications will soon be swept away by the tide of Web-based, outsourced products and services.\u201d<\/p>\n

Think of it in this context . . . the changes we are seeing today were identified in the late 90s, acknowledged in 2010, and acted upon in 2014.<\/p>\n

In the end, what Evans did in the 2010 interview, was confirm that my advice prior to that time was on the mark, while creating a contextual tipping point for industry acceptance of what the handful of one time industry rebels had been advocating all along . . . that technology while important, is not by itself or mere implementation, the sole determining factor in enabling an organization to build a successful procurement practice.
\nJon Hansen | Host |\u00a0Procurement Insights |\u00a0@piblogger1<\/strong><\/p>\n

7.\u00a0 Use outcome based requirements. Often buyers generate requirements based upon how something should be done rather than what the desired outcomes are. The classic example is software in which the buyer creates lists of hundreds of features for the vendors to respond to. This is difficult for the vendor and even more difficult to evaluate and compare. The better approach is to outline the goals for the project and then challenge suppliers to come up with creative and unique solutions.
\nTim Schmidt |\u00a0eBid Systems<\/strong><\/p>\n

8.\u00a0 Ronald Reagan said it best, \u201ctrust but verify\u201d.\u00a0 You should trust your key suppliers but you need to ensure that processes and mechanisms are in place to verify the outcome.\u00a0 It strengthens the supplier relationship,\u00a0 increases compliance and enhances internal customer satisfaction.
\nBruce Marshall | Vice President of Consulting | GEP<\/strong><\/p>\n

9.\u00a0 Go back to the basics. Use proven p2p tools that facilitate spend management, control and visibility while enforcing best practice policies.
\nPuridiom | @PuridiomPros<\/strong><\/p>\n

10.\u00a0 If you don\u2019t ask for a discount, you won\u2019t get one.
\nDan Ross | VP of Sales and Marketing | Bellwether Software<\/strong><\/p>\n

11.\u00a0 Do your homework when it comes to choosing a procurement system.\u00a0 I believe companies that choose a system which is adaptable and the least disruptive to their current processes will be the most successful. Remember, if it\u2019s too good to believe, then it probably is.\u00a0It\u2019s also important not to force fit a solution so don\u2019t over complicate things \u2013 it\u2019s ok to keep things simple and take a pragmatic approach to solving a problem.\u00a0 By doing this, you will achieve success in increments versus having one big failure on your hands.\u00a0 Finally, your team, both internal members as well as your solution provider, should be onboard with this approach.
\nAnthony Kylitis | VP Marketing, Co-Founder | ReactorNet |\u00a0@akylitis<\/span><\/strong><\/p>\n

Leveraging Sales Tactics<\/h2>\n

12.\u00a0 As a purchasing professional, you must convince your management that your work has more value than the money the organization pays for the purchasing department (compensation, office space, resources, etc.). You do this by showing how purchasing activities contribute to the financial health of the organization.<\/p>\n

13.\u00a0 The #1 thing that buyers want to negotiate is price. So, salespeople find themselves defending their prices often. Their goal is to convince their prospective customers that their \u201cnumbers\u201d are fair, using pure logic. In purchasing, you likely find yourself trying to justify to the finance department that your cost savings \u201cnumbers\u201d are valid. Use the same type of logic that salespeople use to illustrate why your numbers should be accepted.<\/p>\n

14.\u00a0 Salespeople aim to convince buyers to stop negotiating, agree to the terms currently \u201con the table,\u201d and place orders in the shortest amount of time. You also want your suppliers\u2019 salespeople to agree to the terms you\u2019ve proposed in the shortest amount of time. Therefore, you need to learn how to negotiate in a way that convinces salespeople to let go of their ideas that they could get better terms for themselves, stop negotiating, and accept your order.
\nNext Level Purchasing Association \u2013\u00a0Powerful Negotiation for Successful Buying<\/strong><\/p><\/blockquote>\n

15.\u00a0 \u201cProcurement is no different than sales, we are both working to deliver growth for the company\u201d\u00a0This advice came to me from an ex mentor, who is now Head of Procurement for Australia\u2019s largest airline. Procurement is not just about cost savings, supply & risk management; we can be innovative too and impact the overall growth of the company.
\nVincent Nguyen | Global Category Manager |International Flavors & Fragrances Inc.<\/strong><\/p>\n

16.\u00a0 Especially in the wake of the near shutdown of the West Coast ports, the best advice I\u2019ve heard is that risk planning matters across the supply chain. Analyze the breadth of the supply chain early and often.
\nHailey McKeefry | @HaileyMcK<\/strong><\/p>\n

Next week, we will have it a battle featuring our Final Four procurement tips! \u00a0If you didn\u2019t have the chance, check out our\u00a0March Madness: 64 Slam Dunk Procurement Tips.<\/p>\n","protected":false},"excerpt":{"rendered":"

Welcome back! \u00a0After a thrilling round of\u00a0March Madness: 64 Slam […]<\/p>\n","protected":false},"author":12,"featured_media":4137,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-3422","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-procurement"],"yoast_head":"\nSweet 16 Procurement Tips (Especially #6) - Next Level Purchasing Association (NLPA)<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.certitrek.com\/nlpa\/blog\/sweet-16-procurement-tips\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Sweet 16 Procurement Tips (Especially #6)\" \/>\n<meta property=\"og:description\" content=\"Welcome back! \u00a0After a thrilling round of\u00a0March Madness: 64 Slam […]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.certitrek.com\/nlpa\/blog\/sweet-16-procurement-tips\/\" \/>\n<meta property=\"og:site_name\" content=\"Next Level Purchasing Association (NLPA)\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/NextLevelPurchasing\/\" \/>\n<meta property=\"article:published_time\" content=\"2015-03-26T18:11:37+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2021-07-14T12:25:30+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.certitrek.com\/nlpa\/wp-content\/uploads\/sites\/5\/2020\/11\/nlpa-images-147.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1600\" \/>\n\t<meta property=\"og:image:height\" content=\"1067\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Galo Matagay\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@nextlevelpurch\" \/>\n<meta name=\"twitter:site\" content=\"@nextlevelpurch\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Galo Matagay\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"7 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.certitrek.com\/nlpa\/blog\/sweet-16-procurement-tips\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.certitrek.com\/nlpa\/blog\/sweet-16-procurement-tips\/\"},\"author\":{\"name\":\"Galo Matagay\",\"@id\":\"https:\/\/www.certitrek.com\/nlpa\/#\/schema\/person\/72d094fab77892483dfa6e061cb27eaa\"},\"headline\":\"Sweet 16 Procurement Tips (Especially #6)\",\"datePublished\":\"2015-03-26T18:11:37+00:00\",\"dateModified\":\"2021-07-14T12:25:30+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.certitrek.com\/nlpa\/blog\/sweet-16-procurement-tips\/\"},\"wordCount\":1390,\"publisher\":{\"@id\":\"https:\/\/www.certitrek.com\/nlpa\/#organization\"},\"articleSection\":[\"Procurement\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.certitrek.com\/nlpa\/blog\/sweet-16-procurement-tips\/\",\"url\":\"https:\/\/www.certitrek.com\/nlpa\/blog\/sweet-16-procurement-tips\/\",\"name\":\"Sweet 16 Procurement Tips (Especially #6) - 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