Leveraging spend across an organization may sound easy in theory or in a Procurement advice article, but may be more difficult in practice. However, it will be worth the time and effort when the resulting cost savings are measured.
The first step is to identify the spend. That can only accomplished successfully by working with the IT department and the Accounts Payable Department. Be prepared for long days and large spreadsheets!
Assuming that part is done, the next step is to bring together disparate parts of the organization for a common goal. This is much easier said than done. Buyers have to identify which purchased items can be consolidated with the fewest vendors.
Strategic Sourcing is often done in waves or in successively more difficult to implement initiatives. In other words, consultants advise that Procurement departments go after the "low hanging fruit" first. Start with something that everyone uses in the company. Office supplies is an obvious first choice.
Precisely because everyone uses this or any other particular commodity may make it one of the biggest headaches. Users are always entrenched with their favorite suppliers. If a user has been purchasing from Staples (SPLS), woe to the one who suggests a contract with Office Max (OMX) or vice versa.
Careful consideration of what really are the easier commodities to implement would be in order when leveraging spend is discussed.
Comment Preview