Articles by "Procurement"
Showing posts with label Procurement. Show all posts

on Monday, July 11, 2022 0
Organizations that have utilized traditional procure-to-pay (P2P) solutions are experiencing the need to monitor spend efficiency more closely. The same holds true for businesses that have deployed a combination of disparate systems, alongside enterprise resource planning (ERP) software. Leaders are prompted to seek more robust solutions—while lowering costs—and find that a comprehensive source-to-pay (S2P) platform is the answer. 

sourcing cycle with multiple considerations
Automate Source-to-Pay Workflow

Increase Workflow Automation
When S2P solutions are implemented, organizations can increase the automation of their workflow and reduce critical cycle times. The ease of use, simple implementation, and visibility across robust procurement workflows are unmatched with end-to-end platforms. Meanwhile, organizations that rely on general ERP applications, may require supplemental tools to manage their complete sourcing to payables process.

Seamless Integration
The best fit S2P will offer a plug and play install and seamlessly integrate with all ERPs. This eliminates the need to migrate data from existing tools or worry about costly downtime. When multiple solutions or “extra” modules must be deployed to extend to end-to-end coverage, customers encounter added cost. This is more painful when teams refuse to adopt the individual ERP or niche solution because it does not meet their needs or otherwise lacks flexibility. 

Tech-Enabled Solutions
When S2P solutions are enabled with the latest technology, features like artificial intelligence support advanced capabilities through process automation and document processing. This is demonstrated in Intelligent AP Automation by eliminating inefficiencies associated with manual processing and boosting compliance. The capabilities of complex document recognition, sorting and classification accessible through a simple, customizable user interface are transformative to the way purchasing is managed. 

Image displays bar chart to demonstrate growth
Monitor spending while reducing costs with your S2P

Intelligent Assistants and other proactive technology are further differentiators seen in S2P platforms. These features add an expanded element of convenience by enabling users to access documents and workflow details, through conversational or text prompts while on the go and outside of the platform interface, using recognized communication tools. 

End-to-End Processing
S2P solutions are designed with the full sourcing process in mind, extending capabilities and workflow visibility.  




Read more »

on Monday, December 13, 2021 0



Many categories, especially those related to construction and transportation have recently been subject to volatile price fluctuations due to a wide array of unique market conditions.  As a result of this volatility many organizations have seen their cost of goods experience an unexpected and rather drastic rise in price.  While predicting these market fluctuations can be difficult, many strategies do exist to help protect your organization against this unpredictability.  The following section below will help identify a few tactics to help protect your organization against market volatility:


Market Index Protection via Contracting

When entering into an agreement with any supplier, from a best practice perspective a “core list” of commonly used items should be populated in the exhibits portion of the contract with a negotiated price list.  This core price list should have competitive unit costs locked in for the entirety of the agreement.  Historically, when pricing is locked in language is populated in the agreement to protect the supplier from unexpected market disruptions and material shortages.  

For example, if a product you are buying is made from stainless steel, and the market price of steel increases at such a drastic rate that it results in a cost increase outside of your current negotiated rate, the goal in this scenario is to protect yourself from additional increases outside of the market index percentage increase.  To achieve this, your supplier must be contractually responsible to provide documentation in writing direct from the manufacturer and/or source that illustrates this price increase as a passthrough to you the buyer, with specific information tied back to steel’s price index supporting the reason for this increase.  This will help protect you from any potential increases outside of market conditions established within each commodity’s pricing index.   


Negotiate Pricing Rebates

Another way to protect your organization against market unpredictability is by engaging in end of year rebate programs associated with spend volumes.  For instance, you can structure your agreement with your supplier in a way to capture a year end rebate based off total annual spend.  Creating a sliding scale of larger rebates associated with higher spend volumes will help protect your bottom line against some of these unexpected increases, while also establishing organizational rewards for program purchasing compliance.  For example, structuring a contract with a 1.5% rebate for $1 million in spend, a 2% rebate for $1.5 million spend, and so on will create protections for your organization in unpredictable market conditions.  


Forecasting & Planning

It’s also important to analyze historical spend data to help identify trends to help get ahead of potential future-state needs.  For instance, if you properly analyze supplier usage reports while also holding discussions with stakeholders regarding organizational goals and objectives, this will help establish a strong understanding of future needs.  It’s also important connect directly with your key suppliers to understand what their market expectations are.  For instance, are they anticipating an unexpected increase in any cost of materials, or perhaps they have potential cost saving opportunities through bulk purchases that could benefit your organization from an economies of scale perspective?


In short, it’s impossible to forecast market unpredictability, but you can implement protections from a contractual and forecasting perspective to help mitigate risk for your organization.  

Read more »

on Friday, December 03, 2021 0

 What is Supplier Relationship Management (SRM)?

Supplier relationship management is the discipline of strategically planning for, and managing, all interactions with third party organizations that supply goods and/or services to an organization in order to maximize the value of those interactions. In practice, SRM entails creating closer, more collaborative relationships with key suppliers to uncover and realize new value and reduce risk of failure.

Getting back to the initial goal of cost savings, the question becomes ‘when cost savings is a critical driver in supplier selection, how do you balance the collaborative relationship with low cost?


The major key is internal alignment between procurement and other business units. Supply Chain leaders must be able to explain why certain vendors are selected who may not be the low-cost option for reasons like customer service, on-time deliveries, payment terms, reporting, etc. while also stating how they are managing those vendors to get the best price possible. 

Category leaders must be able to explain how new suppliers versus incumbent suppliers will impact the company. There are too many cases where the grass appears to be greener on the other side and by selecting a low cost, new supplier, operational differences get lost in the shuffle and the transition becomes a disaster.

Why is Supplier Management Important?

In plain and simple terms, it creates a competitive advantage. Whether you are the procurement or the supply chain leader for your organization, having a strong supplier management system in place allows for maximin opportunities in cost reduction, value driven services, and over all systematic efficiencies which otherwise would be achieved.  

Supplier Relationships

A critical component to any company’s success is their ability to maintain strong working relationships with their suppliers and vendors. SRMs should always look to avoid complacency. You should never be satisfied with the idea of ‘if it’s not broke, don’t fix it’. SRMs should always be looking for opportunities to improve the relationship, streamline processes or procedures, or change costing models. Relationship Managers should always be looking to challenge the status quo.

Another key to a strong supplier relationship is to open that line of communication and don’t be afraid to ask the question, ‘what we can be doing better?’ Here are some quick ideas as to how you, as a customer to your key suppliers, can help enhance your relationship and make those suppliers want to compete for your business. 

• Trust and Loyalty (treat them as more than just vendors)

• Improve technology and automation

• Adhere to payment terms

• Develop communication plans

• Differentiate between price versus value

• Have a dedicated Supplier Relationship Manager (SRM)

• Internal alignment between Procurement and Supply Chain Category leaders


Read more »

on Friday, September 24, 2021 0

 


Big Data has been a central topic for corporations for many years now. Typically, this is associated with how organizations use analytics to figure out their most valuable customers, or to create new experiences, services, or products. When devising this strategy, the organization must be considerate of a few key factors:

  1. How will the data be used? What is the objective of obtaining this data?
  2. What story will the data tell?
  3. What does the data contain? Is Personally Identifiable Information (PII) or Protected Health Information (PHI) included?
  4. Who within the organization plans to use the data?

All these questions are key to develop the data management architecture. The Architecture can be divided into three sections:

A.     Data Management

o   The way the data is collected and stored

·         Data Security

o   Part of the data management plan, but specifically focuses on the protection and transfer of data

·         Data Visualization

o   The output/analytics of the data that complete the story. This involves using the data to influence actions within the company 

As a procurement professional, one should consider coaching stakeholders on adding structure to these three sections before establishing their “Big Data” plan. When it comes to data management, a company can implore multiple methods to ingest and manage data. For example, there may be one method for handling customers that is then used for marketing, and another to handle product testing data to influence product development. Let’s consider a real example:

In the Pharma industry, understanding a patient’s lifecycle journey is often critical to conducting research to produce new medicines for the market. These companies need to understand how a patient may react/respond to treatment even when they have not been treated by the company’s medicines. To paint the full patient lifecycle picture, they need a lot of data from a lot of patients around the world. The good news is this data is for sale. The bad news is that the purchasing process can be tricky.

Patient data is protected by HIPAA (The Health Insurance Portability and Accountability Act of 1996) Laws. This means that it’s unlawful for a company to buy, use, or track health information that can be directly tied to a particular patient without their consent or knowledge. But how do we create lifesaving pharmaceuticals without understanding the people they are meant to help?

We do something called, “Tokenization.” This allows companies to aggregate patient data and then anonymize it so it cannot be connected and tied back to any individual. By not linking this data to a name or person, we can understand a patient’s medical history without ever knowing the patience. Instead of John Smith, we now have JS100637. John’s name is never recorded or tied to the new “Token.” John as a patient may appear in multiple datasets hosted by various clinical sites that do not communicate with one another. But, by having a token, John’s information is anonymously stored to eventually provide us with the data that may create the next big vaccine or cure for cancer.

Big Data faces a lot of hurdles. Humans are resilient and compassionate. We find ways around the hurdles while also respecting one another and protecting our well-deserved privacy. In the world of procurement, we can be the facilitators of this discussion, ensuring our stakeholders consider each possible outcome and solution to the complex problems they aim to solve. The relationships that are required in the previous example are vital to building a stronger data management architecture. There could be one vendor to tokenize the data, another to establish the data management structure and storage needs, and a final vendor to address the visualization of the data. All must seamlessly work together to create a comfortable user experience with optimized efficiency and productivity.  

Read more »

on Friday, July 30, 2021 0

 


I believe that the health of a department depends on the strength of their systems – especially in the realms of procurement and strategic sourcing. As a consultant with over 10 years of experience, I’ve worked within the procurement departments of numerous, global organizations. These days, I can quickly assess whether a team will meet its goals simply by understanding which systems (if any) they have in place.

The truth is: when the proper systems are put to work, everyone’s work life is better. When they aren’t, everyone’s work life is hell.

In a previous role, I experienced first-hand what it was like to work on a procurement team with little to no systems. Instead of complaining at the virtual watercooler with my colleagues about how messed up things were, I chose to do something. I decided to advocate for the implementation of more solid systems. And since this article is designed to help you understand the reasons why things like this are critical to the success of your teams, let’s just jump right in:


1. Strong systems dramatically reduce email inbox clutter and instant message pings

Being a successful strategic sourcing professional requires focus. One must properly prioritize their ever-growing to-do list and expertly manage their time.

In my 10+ year career, I’ve found email and instant messaging to be one of the biggest time drainers. Still, as a team it’s important to have multiple channels of communication because things can and often do change in an instant. Essentially, striking balance in how much time you spend communicating with your team is critical to the success of any strategic sourcing team. After all, no one can get work done if they’re constantly wading through email or if they often have to divert their attention to answer a “quick question” via instant message.

At my former organization, I quickly realized the procurement team was very unorganized. Some members of the team saved contracts and other important documents to their desktop or personal One Drive. Other members of the team saved files in shared folders like BOX, or on the Teams site. However, everyone on the team didn’t have full access to all items in the BOX drive, which hampered productivity severely. For instance, if I needed to see current contracts to understand the history of a vendor relationship, I would have to reach out directly to a member of the team. However, oftentimes, that team member would inform me that they didn’t have access to said contract. This would result in hours of wasted time attempting to track down where the contract was saved. This became very frustrating, because internal stakeholders who inquired about specific information within a contract would have to wait an unreasonable amount of time to get an answer to a basic question, which didn’t reflect well on the Procurement team.    

That’s why strong systems are important and need to come into play. When everyone is on the same page, knows where all the files are, knows who is working on what, teams are more productive. There’s less time and energy spent on reaching out to ask and answer the same repetitive questions and more time spent getting things done.



2. Strong systems make collaboration a breeze

Prior to me joining the team, my former company had recently divested from its parent company. Subsequently, the company acquired another. All this change took place within the span of six months. With this massive change, teams were left to their own devices to get things done, which meant there was no centralized information hub or efficient processes. Trying to collaborate on anything always felt like an uphill battle – mostly because everything was always so all over the place.

I implemented a centralized hub: a Procurement Tracker and Contract Repository that innovated the way the procurement team communicated, managed vendor and stakeholder relationships, shared information, and stored contracts.

The new system I created tracked the Supplier Name, Vendor Contact Name and Email, Title/Purpose of Project, the Internal company the Supplier’s Location, Country in which the work is being performed, the Region in the country, the Level of Urgency, the Current Steps Taken in the project, the Next Steps to be completed, the Date the project was assigned to me, the Date the contract was Executed, the Expiration of the contract, the Dollar Value of the contract, Budget Approval status, Funding Approval status, Savings (if any) of the project, the Type of Document being executed (i.e. MSA, SOW, Order Form, etc.), who the Internal Stakeholder is, and their Contact Information, Vendor Onboarded status, and where the signed contract would be stored (i.e. Teams, Box).

I did this because I knew everyone on the team needed to know where to locate important documents like contracts and invoices at a moment’s notice. There’s nothing more frustrating than not being able to find a file to reference while on a call with a stakeholder or vendor.


3. Strong systems create solid teams who communicate well

I know no one particularly leaps for joy at the thought of attending meetings but having strong systems in place makes them more effective (and shorter!).

Before implementing new systems at my previous organization, I noticed many team members worked in silos and rarely met as a collective to debrief and request help. When we would meet, there were multiple instances where we discovered redundancies because there were team members often working on the same tasks or projects unknowingly. This was another red flag that I brought to leadership’s attention.

So, I introduced the idea of consistent weekly meetings, which became extremely important because the time together allowed us to calibrate, and back someone up if they were out of the office. Nothing is fun about trying to cover a colleague out of the office if you don’t know what they’re working on! It’s almost like drinking out of a fire hose.

Communication is a core reason why many teams fail and succeed. The best systems make it so that communication between team members isn’t overwhelming or even frivolous, but instead intentional and impactful.

Read more »

on Friday, July 23, 2021 0

 For those of us in the Procurement field, negotiating can be the most uncomfortable skill that we must master. Many factors play into a negotiation, and the considerations can easily become overwhelming. There is often so much on the line. The supplier relationship, the client relationship, and the sourcing initiative’s success can all ride on this one simple step.

I believe the skill of negotiating also has the most misconceptions attached to its name. Many think the best of the best dig a hard line in the sand and stick to it. The most successful negotiators are the sternest. But, when you are searching for a win-win, is this the most logical strategy? I do not believe so. Being aggressive towards your counterpart does not lead to successful partnerships. To give an inch and take a mile will not build a long-term relationship that promotes positive growth for your organization.

So, how do you deploy a negotiation that is successful, builds partnerships, and does not make you want to rip your hair out? Read on to see my favorite tips that I employ with my friends, family, clients, suppliers, and in long conversations with my dogs when they are being bad that they absolutely do not understand.

Do NOT Draw A Line in the Sand

As I stated before, the misconception of drawing an arbitrary line and sticking to it no matter what is not negotiating. Negotiating requires some form of compromise from all the parties included. Even with all the power, do you really want to crush a smaller sized supplier? Will the supplier want to help you when times get tough, like in the supply chain disruptions of 2020 due to COVID, if you just gauged them for a single sided contract? Instead, hear each party’s wants and needs and craft a deal that is mutually beneficial. It almost always creates a better agreement in the long term.

Business is Business, Kind Of…

In a negotiation, even when attempting to create a mutually beneficial deal, things can get heated. Remember that your negotiation counterpart is a representative of a larger organization. They have higher ups, in most cases, that are really making the decisions. So, what should you do? Separate the negotiation from the person. Just because they are not compromising on a specific piece of the sought-after agreement does not mean they are attacking you. The issue is YOU. You are too closely tied to your points and are projecting the same attachment on your counterpart. Talk it through and find out why they are not budging. Attempt to craft a solution that provides enough promises to get them to budge or ask for something in return elsewhere to even the playing field.

Kindness is Not Necessarily Good

If you are not a confrontational person that is often a positive. However, sometimes that can cripple you. Just because the goal is a mutually beneficial deal in your mind does not mean that it is in your counterpart’s mind. If you are too kind to objectively quantify your position and stick up for your reasoning, you can open yourself up to getting steamrolled. The lack of tact can lead to bad terms for you and portray that you can be taken advantage of. This will harm your future negotiations, as well. If you have sound reasoning, explain it until the supplier wholly understands. If you do not feel you can push back, get someone who will. Using your coworker’s skills is a benefit to the organization and there is nothing shameful about requiring help.

Require Objectivity and Objectivity Only

Finally, perhaps the most important tip I can offer is to keep negotiations objective. Subjectivity leads to the “drawing a line in the sand” type of negotiations in my first tip. It can also lead to a personal attachment to the items you are negotiating. If you do not think of objective reasons as to WHY compromise should take place, you are not crafting solutions. You are creating whimsical ideas and acting as if they are objective. There is no room for impulsive decision making in negotiating. Use logic, math, statistics, and hard data to provide actual reasoning as to why you want what you want. Use the same objective standard to provide solutions that simultaneously show how your offering gives the supplier what they want, as well. That is creating a true win-win situation.

Hopefully, employing these tips can aid you in more successful and less stressful negotiations. This step in the Procurement process does not have to be the worse. If done right, it can be an enjoyable way to build your rolodex of supplier contacts for future projects. Long lasting, very beneficial relationships can be built that put you and the supplier in an advantageous position within your market.

For more on this topic click here!

Read more »

on Wednesday, July 21, 2021 0

For those who have just graduated high school, a difficult decision lies ahead. You may be enjoying your freedom for the summer, but what career field you will study will need to be decided very soon. If you already made your selection, you also may be wondering if the choice was the right one. Your whole life will be greatly affected by your decision. Will you do something you enjoy, something fulfilling, or something challenging? How about all the above! Procurement is your answer.

So, what is Procurement? According to Investopedia.com, Procurement is the act of purchasing or otherwise taking possession of something, especially for business purposes. To simplify, we in the field of Procurement strategically setup relationships to buy the goods and services a company will need to operate. This seems like something that every company already does, but surprisingly it is not. Every organization, big or small, can benefit from effective Procurement.

Here are a few reasons as to why Procurement is such a great selection for your future career.

1.   Growth Within the Field

Remember in 2020 when the Coronavirus pandemic hit the world and companies were tightening budgets? A simple way for a business to save money is to get strategic about HOW they are buying their needed goods and services. Many companies realized this throughout the last year, and even a little before. By 2028, the Procurement as a Service (PaaS) market is expected to reach 12 billion! This is simply for outsourcing functions related to purchasing. Imagine what the number would be if you added companies who internally control their Procurement functions.

2.    Challenge Yourself How You Want

The art of scoping, sourcing, contracting, and finding savings is more of a challenge than you may think. You must find your current state as a comparison tool to know if your effort was effective. You must know exactly what you want to purchase. You must find who you want to purchase from and come to contract terms that benefit both your organization and the supplier. Planning, organization, data analysis, negotiation, and communication are just some of the skills you will need to develop. Whatever you enjoy, a function of Procurement will require knowledge in that area. You can become a jack of all trades or become a subject matter expert. You can be a strong negotiator or analyze data on your computer for a living. The option to do what you want and challenge yourself how you prefer is absolutely within the field.

3.   
You Will Pay For Yourself

If you are effective, a Procurement department will literally pay for itself. That is job security! Being strategic about how you purchase goods and services can save a company millions. If you analyze expenditures and personnel, the ability to pay for yourself is clearly there. When we were dealing with COVID-19, tightening of budgets caused many to be laid off. Not in Procurement. Us Procurement folks have the business case of being paid for with our efforts. It is not a difficult business case to make either.

These are just a few of the benefits that working within the Procurement field can offer. The career journey can take you from entry-level positions all the way to the C-suite. It is exciting and fulfilling. Whether you are unsure about your choice or completely confused on what your calling is, take the time to consider Procurement. If you are like me, it may be the perfect fit!

Read more »

on Monday, June 07, 2021 0


 In the past, the sole function of an RFP was to engage with the best supplier with the best pricing.  

Today, it isn’t just about functionality and price; the pandemic raised awareness around financial stability and diversity qualifications that should be included when it comes to the down selection process.

Is your company classified as any of the following?

  • Small Business
  • Small Disadvantage Business (SDB)
  • Women Owned Small Business (WOSB)
  • Veteran Owned Small Business (VOSB)
  • Service Disabled Veteran Owned Small Business (SDVOSB)
  • Hub Zone Small Business (Hub Zone)

    Then there are now additional “legal” questions being presented in RFP’s

  • Is your company involved currently in litigation with any company or entity?
  • Does your company have any debarment by governments or any regulatory bodies?
  • Is your company a subsidiary of another company? If yes, what company?

 Beyond the signed NDA or MNDA prior to the RFP release, there now the trend of questions/requirements in the RFP re:

    3rd Party vendors

Proof that there is an NDA between the Potential Supplier and the 3rd party vendor which includes a clause to cover confidentiality regarding work performed for any client of the Potential Suppler. 

  • Proof of any required licenses
  • Proof of insurances

 The RFP should clearly state if 3rd party vendors are allowed or not allowed to be part of the installation and or support of the product or service.  The RFP should be clear if 3rd party vendors are acceptable that they report to, are the responsibility of and paid by the contracted Supplier… there should never be invoices received directly from the 3rd party vendor.

    RFP “Company Questions” around internal employee volunteerism:

  • Does your company promote volunteering? 
  • Does your company allow employees paid time to volunteer?  If yes, how much time each year?
  • Does your company support any non-profits and if yes, which ones?

    Then there are the political related RFP questions:

  • Does your company support any political party? 
  • How does your company provide support?
  • Does your company publicly advertise your support?

     And don’t forget the company stability questions:

  • What us your company’s employee turnover rate? 
  • What has been the employee growth or decline as it relates to revenue?
  • How many acquisitions has your company been part of in the past 5 years?
  • Is your company private or publicly traded? (If public read the stock news/releases.)
  • What is your D&B (Dun and Bradstreet) number? (check it)

    Miscellaneous items to investigate about the Potential Supplier:

  • YouTube content
  • Facebook Page
  • LinkedIn Company page
  • LinkedIn page for representative, and upper management (is there a lot of company hopping by the folks that will be connected to your account?)

Depending on the type of service, you might also want to check their on-line reviews

 I had a client years ago who didn’t do this type of due diligence, signed the engagement with the supplier to only discover during roll-out their insurance policies had lapsed AND all the vendor employees on site were actually subcontractors/3rd party providers.

 When writing an RFP, the above information which has nothing to do with the service or product being sourced is of value.  No stakeholder wants to be called to the rug for a preventable situation.

If you have questions or are interested in having an RFP Sourced please contact me, twankoff@corcentric.com.

 

 

 

Read more »

on Thursday, April 22, 2021 0

Most procurement teams understand the central role project management plays in running an RFP or sourcing event. Equally important is the nuanced approach to all interactions with stakeholders of any kind. This includes our suppliers, internal partners, and executive teams.

How we interact with other teams and organizations speaks volumes about not only our current reputation within our own organization, but also how we envision our team and role growing in the future. Optimize the “image” of your procurement team by,  

  • Positioning your team as strategic allies, and not burdensome bottlenecks
  • Focusing on total value and not just cost-cutting measures
  • Working with Executive Leadership Teams to set expectations

As Brian Seipel discussed previously, better stakeholder management leads to a reputational shift and improved relationships with stakeholders. Prioritizing these relationships is one of the first steps you can take to optimize all interactions with different stakeholder groups (both internally and externally). Applying this same school of thought, we must consider how we interact and collaborate with other teams.

Collaboration, Teamwork, and Reciprocity

While we can wax poetic how to better work with different teams and stakeholders, practical tips on how to interact with different teams can prove useful, if not necessary. Ways to improve relationships with different teams can be boiled down to a few basic tenets. 

  • Collaborate. Find ways to engage your stakeholders early and often, letting them know their input is appreciated and valued. Extend this even further by collaborating with suppliers. Negotiations are more than just redlines, demanding concessions, and moving on. Find ways to have open and honest discussions and see if there are opportunities you can extend scope to generate a better deal for you and the supplier. Ultimately, it’s about being flexible and willing to collaborate with everyone, not just internal partners.
  • Team Mentality. It’s important to emphasize the value of the team dynamic when working with your internal partners. We are all working towards a common goal, and procurement isn’t here to get in the way of internal initiatives. In fact, procurement is here to be a trusted advisor and a valued member of any team. Stress this by reminding everyone we are all members of the larger organizational team. 
  • Reciprocate. Let’s look at supplier negotiations as one example of when we can compromise and reciprocate. Look for opportunities to acknowledge any compromises a supplier was willing to make and extend concessions their way when allowable. We don’t need to be rigid on every clause or condition when dealing with suppliers and showing we’re willing to be flexible builds trust and a healthy relationship between our internal partners and their suppliers.  

Maximize the Value of our Interactions

It is easy to dictate how we as procurement professionals and organizations will interact and work with our stakeholders, suppliers, and executive teams, but taking advantage of the opportunities we have are crucial. A world-class procurement organization maximizes every opportunity with all stakeholders.

Corcentric’s Jennifer Ulrich will be speaking at the ISM World Annual Conference in May on how to do just this. Her session covers how procurement teams can build lasting relationships with key partners to success. She will present three case studies demonstrating challenges we’ve seen among our clients and the solutions we employed to solve these challenges.

Need help maximizing the potential of stakeholder interaction? Register today to attend.  


Read more »

on Wednesday, April 07, 2021 0

Oftentimes when we are engaged by clients to work with their stakeholder teams, these individuals may not be familiar with the Procurement process, especially if they are not a frequent buyer. I can sympathize; when I first began my career in Procurement, I had no background in Supply Chain and had never heard of the “Procure-to-Pay process”, let alone what a best in class P2P workflow looks like. I spent the first few weeks of that summer internship Googling all of the phrases and acronyms used during meetings to understand what everyone was talking about. Therefore, one of the first steps in any project is making sure that the project teams understand what is required to complete the project, whether that is reviewing internal policies and procedures or educating on the general Strategic Sourcing process.

In this blog series, I will review some of the critical documents and milestones in the Procure-to-Pay process, explaining what each steps means and how they impact the business.

Once a purchase need is identified, one of the first steps in the Procure-to-Pay (P2P) process is to secure an approved Requisition.

What is a Requisition?

A Requisition (or Purchase Request) is an internal document used to approve a purchase. The purpose of a Requisition is to make sure that buyers/end users have all of the necessary approvals from their managers, finance, etc. to complete a purchase before a commitment is made to a supplier.

Each organization will have their own defined approval process for Requisitions based on the purchase type and total cost. For large spend purchases (i.e. multi-million dollar piece of equipment), this may mean collecting approval from the executive team before proceeding. Alternatively, small purchases (i.e. new office chair) may only need sign off from your manager.

Why is a Requisition important?

The Requisitioning process is an essential step to make sure that you have the proper sign-offs from your internal team to engage the supplier(s) in purchasing goods or services.

Recently, I was asked by a client to help review and improve their Requisition workflow to ensure that the company was not engaging suppliers when there wasn’t an approved budget. While this company was using Requisitions, it was more of an afterthought by many stakeholders in their quest to identify a supplier for their purchase needs. As the client looked to strengthen financial and budget controls across the organization, they identified the Requisition workflow as an opportunity to quickly address this issue.

In their current process, a contract could be fully executed with a supplier without an approved Requisition and, at times, work may have already begun with that supplier. In the new process, they simply changed the order of steps in their current workflow so that an approved Requisition must be submitted to Legal before they will execute a contract and subsequently issue a PO.

What can you do to improve the Requisition process?

One of the main issues we hear from clients about their P2P process is that it takes too long – there are too many approvals and requests just sit in a queue for extended periods of time. There are many ways to help diagnose what is causing these delays in the turnaround times, but one way to help speed up the process is to introduce technology.

There are many solutions that automate the P2P process by establishing electronic requests and automated approvals. The tool will have built in workflows that will circulate your request to the necessary approvers based on the value, your department, the purchase category, and any other parameters defined by your organization. As individual in the workflow receives the request, they are able to easily approve through the tool and that request will then automatically send to the next person in line. Many of these tools also offer functionality to alert/remind approvers if requests are pending to help minimize delays.

Before you introduce technology, it is important that you first review the process in place to understand if the issues may be tied to the policies/procedures. By reviewing the approval workflow, signature authority levels, and purchase thresholds to ensure that these still align with the current state of the business, you may be able to address many of the challenges faced today.

In future posts, we will review the additional steps in the P2P process to provide insight into documents, approvals, and best practices to ensure that your organization has the right controls in place to effectively monitor purchasing activity.

Corcentric’s Advisory experts can help to review your current P2P process to identify opportunities to drive efficiency and help you achieve your Procurement goals. Similarly, Corcentric offers solutions to help automate your P2P process. Contact our Procurement experts to learn more about how we can support your business objectives.

 

Read more »
no image

on Wednesday, March 03, 2021 0

 As summarised in my previous blog here, building a very strong partnership with your suppliers is one of the key steps towards being a resilient organisation. In this blog, I will try to detail some of the steps one can take towards building a mutually beneficial partnership with suppliers.

Procurement is reliant on suppliers. You can run a procurement organisation without people, process or even technology - albeit not well, but you cannot run a procurement organisation without suppliers. As such, I consider suppliers to be a founding stone for procurement - if procurement were, say, a building.

With the changes and volatility that we are experiencing in the market in recent weeks, it is now more than ever imperative to build an ecosystem where transparency is the key in the relationship with your suppliers; supplier, contracts, category management and even sourcing is no longer about driving savings, efficiency, quality alone. It is also how you inculcate a relationship with your supplier to deliver strategic business value to the business.

Such partnerships have evolved in recent times - companies are increasingly working with their partners to provide cross-functional capabilities within their product ranges. Co-creations from suppliers, suppliers acting as a sales engine, suppliers that fulfill a gap in a product line etc. to name a few are more common now than they were before!

A recent survey from McKinsey in fact goes on to show how companies with advanced supplier collaboration capabilities tend to outperform their peers with 196% EBIDTA percentage growth in company scores of supplier development and innovation.

More than a decade ago, I worked as a category manager for a FMCG company for several categories. It was a great experience...as I quickly began to understand the various commercial structures this company put in place with its suppliers - some of the commercial value sharing models even had co-funded pools where co-development was one of the deliverables that the supplier took on. However, one of the key things in order for such programs to be a success is to develop a process with a structured approach and governance that defined joint objectives, a business case that was beneficial and compelling to both parties, clear and well defined commercials/sharing mechanism with detailed roles and responsibilities, and finally alignment of the incentives of all teams concerned.

Building a strong partnership with your suppliers needs an engaged approach to your relationship with them - this could be fuelled further with the right performance management structures such as a 360 degree feedback mechanism wherein not only are you rating your suppliers but they are rating you too. And such programs work only if the feedback is documented, received correctly, acted upon and done on a regular basis.

For any procurement organisation that is looking to grow into a world class procurement organisation, supplier management, collaboration and engagement is a must-have toolkit. When you have achieved a  desired level of optimisation and have perfected your negotiation strategies to obtain maximum benefits, any further growth and progress of the organisation will need to have a new approach to collaborating with your suppliers. 

I will leave you with 3 key points to building strong partnerships with your suppliers:

1. Invest in a supplier relationship management program to ensure sustainability over time. Ensure you have the right resources, objectives, infrastructure and methodology to run this program.

2. The best way to begin as always is by getting a better visibility into your spend and then use this information to identify those suppliers that could significant value to your business in order to nurture these relationships.

3. Ensure all communications with suppliers are clear, transparent, consistent and easy to access and keep track of by both you and the supplier.

In case you are looking for more guidance or even a place to start with respect to supplier management, Corcentric's Advisory practice team can help you and orient you on how to carry out the steps outlined above.

Read more »

on Friday, February 26, 2021 0


As we head into the 2021, it is important to recognize the transformative shift within the Procurement function over the past decade. Previously, a typical purchasing function is limited to a buy-sell transaction or focusing on cost savings or supply continuity. Today, strategic sourcing is a proven approach to establishing increased competition, cost reduction, creating relationships with suppliers, thorough understanding of market / internal company requirements, reviewing spend analytics, category management, and much more.

Have we observed a big shift in the way strategic sourcing is executed? Many business leaders are eager to improve processing, reduce costs, and optimize competitive advantages. To do so, they must be able to reshape their supplier relationships, align on strategies to revamp the desired future state, and recognize the competitive advantages strategic sourcing has shaped across decades.

Providing Value-add Services - Beyond Savings

Today, procurement professionals are expected to deliver services beyond cost reduction. The demand of strategic sourcing has shifted to offer value-add capabilities, such as:

  • Data Analysis:
    • Collection and in-depth analysis of essential data to consider the best-in-class go-forward strategy
  • Supplier Management and Development:
    • Investing and sustaining supplier relationships
    • Identify opportunities to create total cost savings above and beyond piece price reduction through leveraging supplier relationship.
  • Leveraging market intelligence to improve efficiencies
  • Utilizing competition to negotiate and reduce overall costs
  • Make realistic, impactful recommendations that address constant organizational advancements and supplier relationships

For decades, driving savings has always been a primary goal within procurement. Note, savings is typically recognized as the key highlight and how procurement is known, understood, and valued across organizations. However, the current state of procurement is shifting and being tasked with a deeper, more meaningful way procurement is driven, thriving beyond hard dollar savings, cost containment, or cost avoidance.

Within the procurement workspace, talent has dramatically increased over the years. The procurement function has greater expectations - competition within the field has risen higher than ever before. Procurement professionals are being tasked with increasing the speed of project delivery, faster innovation, accommodating tighter budgets, and addressing competition within the marketplace.

Digital Transformation

Digital Transformation is changing the procurement function. Many procurement companies have been tasked with agility, speed, and scalability to address the impacts of procurement disruptors. The key to success is capitalizing on the undertaking of digital transformation and using this as an opportunity for growth, competitiveness, and efficiency. 

By 2021, the world of digital transformation has required procurement professionals to think creatively, digitally, and become data masters. We must accept that change is constant, and collaboration between procurement and data science teams will always be meaningful and relevant. According to GEP, leading companies are pursuing “digital-first” strategies. 

--------------------------------------------------------------------------------------------------------------------

Corcentric, and its resources, has been extremely proactive with advancing technologies, improving data analytics tools, and staying in the-know for software developments and procurement transformation. We offer AP Automation, procurement, and billing solutions to help companies optimize how they purchase, pay, and get paid. A key focus is delivering services inclusive of additional value-add capabilities, such as building sustaining supplier relationships, applying relevant market intelligence, benchmarking analytics, consulting, and more.

For more information on how we offer top of the line procurement and consulting services (beyond hard-dollar savings) and ways we keep up with digital transformation – please email us at sales@corcentric.com.

Let’s get started today!

Read more »

on Friday, February 26, 2021 0


Quarterly Business Reviews, also known as “QBRs” are a critical piece associated with any successful supplier relationship program.  While interacting with clients and suppliers, a concerning trend often identified is that many organizations seem to lack any strategic level of relationship management once a long-term agreement has been put in place between two parties.  In other words, a supplier’s contractual agreement is essentially put on “auto-pilot” with minimal oversight until it is ready for renewal.  This is a critical misstep that organizations should avoid, much like not taking your car to the mechanic for a check-up, not having check-ups scheduled with your contracted supply base will lead to an inevitable breakdown of expectations between both sides overtime.  This blog will help explain how establishing QBRs with a supplier for 1 hour per quarter will help save your organization countless hours and dollars via strategic alignment and corrective action.


Suppliers to coordinate QBRs with

If you are an organization with a large umbrella of suppliers providing a wide array of services, QBRs simply are not a viable solution for every supplier that is under contract.  The goal here is to identify what I like to call “mission-critical” suppliers that your organization relies on for success.  In other words, that supplier’s success leads to your success.  Keeping a pulse on these key suppliers will not only ensure continuous progress is occurring, but it also helps drive home the fact that accountability and open communication is an expectation for all parties involved.  For contracted suppliers not associated with mission-critical pieces of your operation, annual reviews are an excellent alternative to ensure goals and expectations are still being met.   


QBRs and contracting

After identifying your mission-critical suppliers that will require QBRs, it is important to ensure your contractual agreements are crafted in a way to help manage expectations for these reviews moving forward.  Another way to look at this - If it is important to you, make sure it is in the agreement to ensure all parties are on the same page.  The agreement should clearly highlight required KPI reports and other trackable metrics that must be provided on a quarterly basis for the team’s review.  This type of reporting can easily be tied back to prior reports which will allow for simple trend identification and problem solving for any potential pain-points. 


What should be discussed during a QBR

Create a clear concise agenda with critical talking points to ensure all topics are given ample time for review.  It is also important to ensure you invite key decision makers and critical stakeholders only, this will allow for quick and easy alignment regarding any strategic level concerns due to the organizational hierarchy already being present.  

A critical piece that should be included in your agenda is the discussion and review of KPI reports that were negotiated at the onset of the agreement.  While KPI metrics vary greatly between categories, a few metrics that tend to provide value include topics such as: Financial Performance, Customer Satisfaction, Business Processes and Organization Growth/Forecasting.


Next steps after a QBR

Get the next QBR on the calendar!  You would be shocked how difficult it is to have all calendars align between both parties when many members on the call are a part of senior leadership.  Utilize this time to have everyone open their calendars prior to ending the meeting to establish the date and time for the next QBR.  You also want to take the time to assign actionable deliverables and goals not only for the next QBR but for any pain-points identified during this meeting that require immediate corrective action.  Be sure to assign due dates and do not forget to send out an update at the end of the meeting reminding everyone of their assigned action items and delivery dates.


The end goal of a QBR is to essentially have this supplier perform better for you than for your competitors.  Chances are your competition is utilizing this supplier in some capacity as well, as a result going through the process of creating trackable metrics to help manage expectations on a quarterly basis will ensure this supplier performs better for you than your competitors.


Read more »

on Tuesday, December 29, 2020 0


For as long as I have known, procurement organisations have been measured by its efficiency - this could be determined by the savings they produce, quicker turn around times and efficiency in approvals ("Where is my PO stuck?", "When will my goods arrive?", "When will my supplier get paid?" are terms everyone is familiar with).

As described in my previous article, Covid-19 has changed the way procurement functions and works! After all, what's better to do in the aftermath of a crisis than to learn from it and change the way we work. Resiliency is the need of the hour.

In July 2005, I was working for a large company in Mumbai that was in the process of implementing a data center for its customer. Everything was going great. Goods were being delivered by the suppliers on time, the installation and implementation was in full swing. We had ordered tape drives (DL-380 if my memory serves right) from a supplier in Finland. The tape drives arrived at the customs office on 25th. We cleared them from customs (there are a billion forms involved) and brought them into our warehouse on the 1st floor of our facilities in the outskirts of Mumbai - which also housed warehouses and logistics facilities for a lot of companies. The installation was scheduled to take place on the 28th (as there was some pre-work - cabling etc. that needed to be completed). If you are familiar with what happened next - it was a nightmare that one couldn't have fathomed. The Mumbai floods impacted each and every inch of Mumbai like never seen before. By the evening of the 26th, the tape drives(along with a lot of other equipment and most of Mumbai really) was submerged in water. 

So we now had procured a tape drive that was expensive, not delivered to the customer and hit not only the looming data center installation deadlines but as anyone in supply chain is painfully aware, the insurance did not cover natural disasters and hence it hit our costs as well. As luck would have it, the supplier did not have another one ready for shipment either. Not surprisingly, we quickly then had to fold the costs within the margin of the whole project leaving us with absolutely no more room for error or delays. Needless to say, it ended up being a project where the cost was higher than the sale!

In the aftermath of this event, we quickly went about building more strategic long term relationships -ones focussed not just on the money aspect and efficiency(SLAs) with our suppliers that were just collaborative in nature.

I think the Covid-19 situation has brought about a number of similar challenges. How can we ensure resilience in the procurement organisation that will help meet the challenges if and when the next wave of Covid-19 happens or in the aftermath of this pandemic? What about resilience in wake of Brexit? 

Focus on long term relationship fostering with your suppliers - Treat them as partners. Remember that great relationships are built are trust - this applies to your suppliers too. What this means is that you are no longer measuring your suppliers on efficiency alone but you create meaningful gain share contracts that lets them play a strategic role in the way you do business. Contracts are not just about how much savings you can deliver, but what is the right price to do business at which keeps the supplier motivated equally.

One of the key changes that we see taking place in the aftermath of Covid-19 and rightly so - is organisations taking stock of their risks and assessing if it is indeed wise to have single source supply bases for critical items especially when you consider:

1. Due to companies having focussed before on reducing costs and building efficiencies, the single source suppliers more often than not tend to be based in Asia or other low cost countries. 

2. For those suppliers based in such countries, deliveries are still delayed and challenging considering not just the amount of restrictions on trade per se that have been imposed by individual countries but also the logistical nightmares in terms of transport that Covid seems to have created.

The pandemic also seems to have created a volatile demand of goods - for instance, there was a spike in toilet paper purchase, which we all know will lead to a lesser than expected demand in the coming months for toilet paper and other such commodities. Costs for raw materials are also increasingly volatile owing to region specific shutdowns.

The point I try to make is this: Sometimes, it is not easy to to balance efficiency and resiliency. But the cost of doing nothing will also be very significant. In summary, here are some of the steps an organisation can take towards being resilient:

1. Build a strong partnership with your suppliers.

2. Diversify your partner ecosystem.

3. Ensure sufficient capacity buffers in your inventories/stock/forecasts.

4. Take stock of your procurement function, now!!!    


Read more »

on Monday, November 30, 2020 0



They say we are approaching a dark winter ahead with COVID-19 cases on the rise. There is however a glimmer of hope with a few promising vaccines in queue to receive expedited approval. This week it was reported that United Airlines began its first shipment of Pfizer’s vaccine from Brussels to Chicago. There is an immense effort underway regarding vaccine distribution and supply chains are going to be tested to their limits. This is definitely an all hands on deck moment and it is going to take a herculean effort on the part of many parties. The challenges ahead really emphasize the need for robust procurement and procurement fundamentals on a few levels. 

First is relationships. There are many companies out there with complementing capabilities that allow for a full end to end delivery of the vaccine. Without everyone working together for the collective good we won’t achieve accelerated results. Procurement teaches us the value of relationships and relationship management. We are human at the end of the day and challenges exist in breaking down communication barriers to ensure we can work with others effectively. Oftentimes procurement works with many stakeholders throughout a business, building consensus and alignment. These fundamental ideas are core to collaborating both internally within an organization or externally with partners and competitors. It is crucial when the stakes are high to evaluate the strengths each party brings to the table and let them own those areas. Additionally relationship management throughout the supply chain must be achieved in the present to ensure success as well as into the future for long term sustainability. Each critical supply relationship must be evaluated and a strategy crafted to ensure an effective partnership.

Second is cost. Many might be thinking with the time sensitive nature of this initiative there is no time to think about keeping costs in check. Rather I would challenge to say understanding cost drivers can help build a sustainable and robust solution that does not cave to unsustainability over time. In procurement oftentimes we look to reduce costs however that is not the only factor. We help to identify value, right size requirements and optimize resources. Reducing cost is a by product of all of those endeavors and helps drive the right level of value and resource within a business. Helping to optimize cost of vaccine distribution not only allows for a more accessible vaccine to all demographics and populations but also ensures companies will not go in the red undertaking this effort.

With all pieces of the puzzle coming together through relationship management, cost optimization and full integration across the board we can ensure a successful distribution of this critical vaccine. It is important to note some key procurement fundamentals are at play and will propel success. Many of these fundamentals can be applied to other challenges but it is ever important with the current pandemic to leverage these practices effectively.
Read more »

on Friday, November 13, 2020 0


The request for proposal (RFP) process is critical to making successful business decisions and investing in the future. The RFP process allows IT stakeholders to determine which vendors are best qualified, cost-effective, and able to meet the companies desired end-state. The first step to carefully selecting vendors to participate in the RFP is to gather the appropriate vendor selection criteria. I have outlined key factors to consider before finalizing whom to invite to participate in an RFP.

Discovery:

The discovery process should encompass discussions with key stakeholder(s) to identify specific business goals, establish budget, and ensure the current state is clearly defined. It is important to understand the current state of spend, account management, usage, bandwidth, licenses and subscriptions, contract terms, etc., as it applies to the category under evaluation. To ensure the current state is accurately captured, I’d recommend gathering any required data collection items that may be valuable, such as a copy of the contract with their incumbent, pricing agreements, quotations, usage reports, current invoice(s), and any other important information that may be useful. Additionally, the documentation within the discovery process should help to define challenges, priorities, and encompass the stakeholder(s) wish-list for the desired end state.

Research, Analysis, and Identification:

Once the information has been received, analyzed, and reviewed with all appropriate parties, the next step is to identify suppliers who meet the specified criteria. First, additional due diligence must be performed to understand the suppliers that are currently being leveraged in the marketplace for the specific category at-hand. Based on the category under evaluation, there may be many suppliers that are capable of meeting the client’s needs. To winnow down the pool of suppliers to align with the organization’s needs, I have outlined a few key areas to consider below:

  • Key offerings and capabilities
  • On-going support (if applicable)
  • Experience, certifications, and relevant partnerships
  • Year company founded
  • Total Revenue
  • Global / National presence
  • Typical Client Size (e.g. Small vs. Large Corporations)
  • Size of the company (Total number of employees)
  • Customer reviews and current new updates

In most cases, it is standard to include the incumbent as a participant in the RFP. Nonetheless, launching an RFP gives insight into the current market and supplier offerings as it evolves. This insight can be utilized as negotiation levers if the client wishes or selects the incumbent to continue services for a desired term.

Through the information described above, this will help to exclude specific vendors based on the information gathered in the discovery process and additional knowledge revealed in the due diligence phase. By advancing only those suppliers who meet the defined criteria, this will limit the amount of time spent in future processing and maximize the chance of finding the best match.

Read more »
Subscribe to: Posts (Atom)