Tag: sourcing managers

IR7

E-Sourcing: An Essential Component in Devising a Good Sourcing Strategy

E-sourcing is simply the digitization of the sourcing process which involves consolidating proposals, quotes, and e-tenders from various suppliers. Traditional sourcing processes are time-consuming and tedious and are unable to handle a large volume of information. As a result, sourcing of goods and services is carried out with limited available information and is based on the relationship with the supplier. However, the advent of modern technology has changed this trend as organizations have now realized the cost saving potential of a good sourcing strategy.

Implementation of an appropriate e-sourcing tool can help optimize productivity and lower annual spends in the following ways:

More Data Leads to Informed Decision Making

Data and information on supplier prices and offerings are easily recorded within the e-sourcing application, which also facilitatesGet more info digital quotations, catalogs, and e-tenders. A procurement manager is equipped with vast information to base his decision on as it enables him to invite multiple bids from different suppliers, analyze product and price offerings, and contract terms of multiple suppliers. The data collection process should start right from the spend analysis, which gives the procurement manager information on most important categories and best cost saving opportunities. This paves the way for e-sourcing project selection by evaluating top opportunities with regard to organization goals and Time to Value (TTV).

Cost Savings and Improved Efficiency

Access to a large number of suppliers, analysis of their offerings, and process digitization helps organizations maximize on cost-saving opportunities. It also speeds up the procurement process by reducing the time for the tender process, reducing the person hours required for sourcing and procurement activities, and eliminating lengthy paperwork.

Improvement in Supplier Relationship

E-sourcing provides transparency in transactions between buyers and sellers as suppliers can have a glance at all tender opportunities with all the details listed. The communication delay is eliminated as suppliers are fully aware of all the bids and tenders, which are directly processed through the portal. Since e-sourcing eliminates all geographical barriers, procurement managers can look forward to suppliers from much larger geographies.

Better Compliance and Risk Reduction

Digitization and systematic approach of e-sourcing eliminates lengthy paperwork for contract compliance adherence – facilitating internal audit. With the help of e-sourcing, procurement managers can create templates for sourcing activities, which ensures adherence to policies and conditions.

A purchasing manager is presented with a vast amount of data and information for his sourcing needs. It paves the way to devise a better sourcing strategy by helping the purchasing manager to decide on the appropriate RFx document.

To know more about e-sourcing and how it can help in effective procurement:

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IR36

Procurement and Sustainability: What does 2017 have in Store for Sourcing Managers?

Sustainability is growing as a priority for consumers and businesses alike. More and more customers are demanding responsibly sourced products, and it is becoming increasingly important to take the state of the environment into account when operating as a business. Aside from concerns over ethics and consumer demand, however, sustainable practices can also be more economical, and should, consequently, be taken into account when formulating sourcing and procurement strategy.

Transparency and sustainability can be a significant draw for consumers. People can be highly loyal to companies that share and act on their values, and many are willing to pay a higher price for such things. They are also more likely to trust an organization that is open about its processes and sources. In terms of costs, sometimes environmentally friendly policies are also more cost-effective. Reducing fuel use and CO2 emissions, for example, can provide significant savings.

The stats: sustainability is on the rise

EcoVadis has just released its latest report on sustainable procurement, titled “Scaling Up Sustainable Procurement: A New Phase of Expansion Must Begin.” It surveyed 120 companies in a variety of industries, as well as 360 suppliers. The study reveals that 97% of procurement organizations believe that sustainability and corporate social responsibility are important or critically important to operations. The motivation for sustainability varies by region — in the United States, the main motivator is risk mitigation, while European companies are more concerned about brand reputation.

The report also found that 76% of companies noticed an improvement in brand reputation as a result of sustainable procurement activities, and 55% had better supplier relationships. Sustainability is becoming a bigger focus for companies across the board, with the study showing an increase in sustainable activities in several areas over 2013, the year the previous version of this study was released. In order to remain competitive, companies can no longer afford to ignore this aspect of procurement decisions.

Putting it into practice

So how does a company ensure that its procurement strategy is sustainable? The process starts from within the organization. By setting an example at the highest levels of management and encouraging employee investment, it will be easier to integrate sustainability practices at every level. Soliciting suggestions and feedback from employees can bring in new ideas and increase engagement. Making sustainability part of an individual’s goals can also be effective.

Feedback and transparency are also valuable. Not only does more information increase one’s ability to make effective procurement decisions, but it also allows people to see the impact that their suggestions and efforts make, both on the company and the environment and on people around the world.

In terms of implementation, strong external reporting is essential. Without an accurate view of the supply chain and individual supplier performance, it is impossible to manage sustainability throughout the procurement process. By the same token, having a good relationship with suppliers is critical, as communication and cooperation can improve results significantly.

There are several factors to consider when establishing procurement strategy, and it can be difficult to determine what areas to prioritize (production, transportation, etc.). It is important to have a thorough understanding of the supply chain, the company’s goals, and stakeholder values. This makes it possible to narrow down the most important aspects and the ones that have the greatest impact and decide what can be ignored or receive less emphasis. By keeping all these factors in mind, it will be possible to gradually establish a supply chain that benefits both the environment and the company.

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