Sourcing and Procurement
How Can Sourcing and Procurement Gain From Combined Success Stories?
I was in the process of wrapping up a sourcing project for a client, when we received a call from the secretary of a senior partner of the supplier organization. She wanted to set-up a feedback session on the vendor selection process and their performance. Now, this seemed like some kind of a mistake. Usually, the suppliers who are not selected ask for such a feedback window. I explained to her that their organization had been selected and the contract negotiation phase will commence soon. In fact, it turned out that she was aware of the status and mentioned that their organization had this policy to request a feedback session with the client not only for the business lost, but also for the contracts won.
I found this absolutely intriguing.
Under many circumstances, we mostly try to get feedback when things go wrong or when we need to learn from our past mistakes. But isn't it equally critical to retrace the right steps? While this is a universal scenario, as professionals in Sourcing and Procurement, it makes sense to apply this practice for most of our activities.
There are situations when some projects conclude successfully, while some face constant hiccups. For one project, you are able to achieve most of the project objectives such as cost savings & efficiencies, while for another the progress is steady but not exemplary.
How can we build best practices from successful S&P outcomes?
Best Practices from Successful Sourcing and Procurement Initiatives
- Pat your back and retrace the right steps taken When you know that the job has been done well, embrace the positive feedback and reassure yourself. Essentially, avoid the natural tendency to do post-mortems on things that did not end up as expected. One of my colleagues once used a very relevant analogy to explain how a particular business win was achieved by citing strategies from soccer.
He compared forwards to Sales, midfielders to Solution Design, defenders to Delivery and Operations and the coaches to Leadership, all working collaboratively to achieve a common goal. Celebrating success improves teamwork too. This can ultimately enhance the openness and the willingness of the team to work towards a constant win.
- Create a repository of detailed case studies Most of us in Sourcing and Procurement document case studies. Especially, if you support solution design or business development teams on an ongoing basis, creating case studies is a regular affair. However, it is critical to gauge whether these case studies are detailed enough and provide a holistic view. While judging the extensiveness of each case, it is critical to understand the underlying or future requirements.
For instance, a concise case study might be sufficient for a sales pitch presentation, while a detailed version will be required for internal documentation. This will only ensure that the documented case study is relevant for any future reference.
- Develop a structured library of RFx literature Again, a lot of us in the sourcing field create RFI, RFP and RFQ documents every day. Some of these crucial documents can be customized from standard templates that may be available. Others are created from scratch based on the commodity sourced or from the client environment.
However, my overall experience indicates that some RFx documents are better than the others. This can be decided based on the quality of the responses received from vendors, the completeness of the vendor submissions, or the responses to the clarification questions received from suppliers at the Q&A stage.
A detailed collation of RFx documentation comes in handy while executing similar sourcing projects in the future. Any logical indexing and grouping of the documents by category, commodity or by client industry (such as pharmaceutical or automotive) can provide a simple structure to this library.
- Learn from your clients As a practice, we go to the client and advise them on best practices, opportunities to ensure cost effectiveness and implement disruptive technologies that can impact the procurement function, or even discuss their ongoing challenges. At the same time, it is crucial to learn some best practices from clients as well, which might not be easily visible at first.
As a practice, we go to the client and advise them on best practices, opportunities to ensure cost effectiveness and implement disruptive technologies that can impact the procurement function, or even discuss their ongoing challenges. At the same time, it is crucial to learn some best practices from clients as well, which might not be easily visible at first.
- Learn from your suppliers Professionals in sourcing and procurement get this unique opportunity to meet both parties from the demand & supply ends. We get to understand the business requirements from the client and what goods and services are available from the vendor. When meeting suppliers, we mostly narrow down the discussions to find answers to a particular 'buying question' and overlook any further insight from the party.
Suppliers being organizations that run business operations, also work towards cost and operational efficiencies. They can share some success stories on making their buying process smarter. For instance, they could be better at buying their raw material for their production or assembling process. You can get resourceful feeds from their best practices and assess implementation within your area of work.
Key Takeaway for Sourcing and Procurement Professionals
Learnings from success stories can be effectively implemented within enabling technologies such as Big Data and the Internet of Things (IoT).
Let us consider a smart washing machine that sends out megabytes of information to the manufacturer, which would be traditionally used for identifying and rectifying issues. However, the same data can be used to enhance the cost-effectiveness and efficiency of the appliance by assessing factors such as water temperature levels, cycle duration, optimizing water usage, or reduced energy consumption.
These findings can be used for subsequent firmware upgrades or even for building better appliances. Hence, success can be achieved using big takeaways from success stories.
As I understand and infer, when lessons from sourcing and procurement success stories like these are unified with technology advancements such as machine learning (ML) and artificial intelligence (AI), it enables further growth, efficiency, and triggers innovation.