Sustainable procurement is all about delivering value without killing your suppliers. Because if they are not successful, they won’t be reliable and you won’t be able to deliver to your customers. To help you reach the next level of purchasing maturity, we can deliver the below services to your company and develop the best practices for your purchases.
By using marketing tools such as the Kraljic matrix, SWOT analysis or Pestle with a procurement twist you gain a deep understanding of each of your category. Is your category on a monopolistic market? Is one of your raw material becoming scarce? Have some suppliers decided to merge? The more an insight you have, the better the strategy that you will devise. In addition, a clear hierarchy of your category spends will tell you where you should concentrate your time and efforts. Anything with less value/strategic importance should be automated. This strategic planning will save you time and money.
How is your company taking in new suppliers? Do you have a pre-qualification process in place to verify your potential supplier’s standards? How do you measure your supplier performance? Do you meet your suppliers on a regular basis to understand how they are doing, what is new for them, how you could improve working together? Have you set partnerships for your strategic supplies? How often do you assess your supplier base to see if there are suppliers that you rarely/never use?
Specifications are key documents for any industry. They set the standards of what is needed for your company to run. To document your needs is to make sure that the knowledge stays in house and doesn’t rely on people’s knowledge. However, specifications should be live documents that are updated on a regular basis between buyers and contract owners. This is a good opportunity to challenge over-specification and to introduce innovation.It is also important for the contract owner to understand the risks for each supply and their evolution in order for them to be proactive when ordering.
The market analysis is often included in the definition of category management. However, not every purchasing department is organised in a category management style. In any case, it is crucial to be up to date with the suppliers on the market, the alliances, the new entrants in order to produce a market risk assessment. Your strategy can be very different if your supply is on a competitive market or a monopolistic one. Understand how the suppliers innovate can be key in the run with your own competitors. Too often companies are reluctant to change technologies where they could gain in time and money.
Tools and processes
In order to implement the strategies we designed together, you might need tools and processes. We can provide you with templates that will facilitate your work, save you time and gain in efficiency.
Worlds of innovation
A good reason to go further in your relationship with your strategic suppliers is first to realise savings thanks to economies of scale that you couldn’t reach on your own. The second good reason is that your supplier will trust you to invest in and/or try their innovations first. This enables your company to be at the forefront of your market, to put yourself a step above the competition and to tailor innovations to suit your business needs.
- Analyse categories and understand the dynamics = STRATEGY = planning for success
- Market research = COMPETITIVENESS = New supplier, new techniques, innovation
- Negotiate supply deals = TENDERING = best offer on the market
- Formalise deals with your suppliers = CONTRACT = cover if something goes wrong
- Analyse processes in place = PERFORMANCE ASSESSMENT = Optimise efficiency
- Analyse supplier base = HIERARCHY OF SPENDS = Allocate time where it matters
- Sourcing evaluation = RISK ASSESSMENT = Safe supply
- Train staff = SELF DEVELOPMENT = Implement best practices