Source One's series for keeping up with the most recent highlights in procurement, strategic sourcing, and supply chain news week-to-week. Check in with us every Monday to stay up to date with the latest supply management news.
Michael Lamoureux, Sourcing Innovation, 11/28/2018
Lamoureux opens this series on current generation Procurement software by wondering aloud why so many underwhelming solutions continue to thrive. e-RFX, e-Auction, and basic SIM have been around for decades, but they're still all that most solutions are offering. The Doctor suggests that low standards for usability, efficiency, and effectiveness have all contributed to our current situation. Today, organizations that use their platforms to create RFX documents will find themselves faced with limited templates and forced to perform most tasks manually. He concludes by detailing the potential benefits of a more modern platform. These tools, he suggests, will auto-score RFI responses, automatically define critical gating questions, and provide informed suggestions for which templates to use.
Over the last several months, Art of Procurement's Phil Ideson has published this series aimed at challenging 'conventional wisdom' in Procurement. This time around Ideson addresses the notion that RFPs are always the most effective way to compare suppliers and make a strategic selection. Buyers, he suggests, often make a dangerous assumption. Putting too much faith in the RFP administration process, they let themselves believe that strong responses are a guarantee. The reality is far murkier. Ideson advises Procurement to conduct thorough research and even informal interviews to create more precise supplier shortlists before sending out their requests. This alternative to the spray-and-pray approach will likely result in more useful responses and more fruitful supplier relationships.
A Simplified Approach to Indirect Spend Management
Sean Bliss, Spend Matters, 11/29/2018
Poor indirect spend management can quickly prove costly. Taking a more effective approach, Bliss suggests, starts with visibility. He writes, "Having poor visibility into your indirect categories means you have no real understanding of your actual spend, cash flow, and working capital status." Indirect purchases can represent as much as 40% of an organization's corporate spend. It's not hard to see why visibility is so important. Bliss offers four steps for bringing this essential spend area under management. Consolidating indirect spend to key suppliers, providing employee education, seeking out real-time visibility, and avoiding complacency all promise to improve Procurement's performance.