Tim Johnson's blog

Getting Optimal Results from Complex Categories: Sourcing Optimization

sourcing optimization for procurement

SIG University Certified Sourcing Professional (CSP) program graduate Tim Johnson details the power of true sourcing optimization within the organization.

It is incredible how many companies are still using a basic RFP platform with minimal scope for optimization. Even the platform Excel has no capacity for optimization or sourcing processes to manage the sourcing of highly complex categories. None of these methods can deliver any substantial savings or ROI.

A simple and easy-to-use sourcing platform is all you would need – even if you are not a sourcing specialist – for a three-bids-and-a-buy sourcing project to source a single item. But if you have hundreds of suppliers and thousands of possible scenarios, a simple platform does not make the grade. As for trying to manage (and more importantly, analyze) complex sourcing events in Excel, that will require a full-time mathematical genius or a team of full-time employees for weeks or months on end trying to figure out the best outcomes. 

To manage the sourcing of complex categories and create business value, you absolutely must use a solution that takes full advantage of the power of optimization complemented with artificial intelligence and game theory.  

To be “complex” in the sense of the word here, a sourcing category needs to meet some combination of the following criteria:

Tim Johnson, Sales Director, JAGGAER