Sourcing In the Midst of a Pandemic

Sourcing Strategies

SIG University Certified Sourcing Professional (CSP) program graduate Daniel Coggins shares how his organiztion has adapted their sourcing strategies to best suit the current challenges the pandemic has created for the sourcing world.


The entire world right now is experiencing a time unlike any other. COVID-19 brings about societal challenges unlike any we have faced in the past century. We’re working through health, psychological, and economic challenges while not knowing how things will be a week from now. I want to share how the current pandemic impacts a sourcing professional’s day-to-day job in various ways.
 
One area of sourcing that has been dramatically impacted is stakeholder management. Four weeks ago, we were all working in our corporate office, going to conference rooms for meetings, and business proceeded as usual. Then, very quickly, that all got turned upside down – all employees were moved to remote working quarters, discussions began to be conducted remotely over video conferences, and projects began to be prioritized.
 
As a sourcing professional, I quickly adapted to these new circumstances to serve my internal stakeholders. Communication became even more critical than it was before. I have been working hard to ensure that all stakeholders understand their position and responsibility on each project that they are tied to.
 
Email communications about renewal and RFP progress have become vital. After each meeting, I ensure that each team member knows the following steps, who leads each step, and the deadlines for accomplishing those activities. From a systems perspective, I have been uploading our contracts into our repository so that the team has visibility to look at contract terms and expiration dates at all times. Working in IT Sourcing, I am religiously keeping track of all our contracts, renewals, and expirations so that no renewals pass by without renegotiations or reviews. I am working with the business to prioritize their needs and wants from a purchasing perspective.
 
Some products and services that we have bought in the past are being cut off to reduce unnecessary expenses. Building trust with internal stakeholders has been essential to this activity because the business needs to know that you have their best interest in mind – you’re not the bad guy in the situation when you ask them to reconsider if a purchase is needed or a certain quantity of purchased items is warranted. One example of this has been one of our software service packages – a premium white-glove service. We’ve had to work with the business units that enjoy this service and come up with an alternative to providing these services internally so that we can not renew this expensive renewal.
 
I have not only been working with internal stakeholders throughout the pandemic, but I have also been highly engaged with our supply base. Since the future is so unknown, cash management is the number one priority at my organization right now. We’re working closely with suppliers to do a number of things to support prudent cash management. We’re deferring payments to next quarter, we’re requesting that payment terms be moved from 30 days to 90 days, we’re looking to break up annual payments into quarterly or monthly payments, and we’re looking for services or scopes that we can decrease to eliminate expenses.
 
Overall, suppliers have quite an understanding of the economic climate that we’re in, and I’ve been met with many cooperative supplier representatives. However, I am still going to suppliers with a more extensive list of asks in these negotiations to have the opportunity to turn something down. This allows me to get still what I need while also helping the supplier see that I’m giving something up. Once we have an agreement with suppliers to adjust payment terms, payment dates, or payment amounts, I’ve been working with my spend management and accounts payable teams to memorialize the new terms. Staying aligned with all of the pertinent sections internally has been vital so that we ultimately realize the positive impacts.
 
My strategic sourcing team is providing great value right now to my company. No one knows how bad things are going to get or how long they’re going to last, but I can say confidently that sourcing activities will remain central to the health of my organization moving forward.

The Certified Sourcing Professional (CSP) Program is a 10-week course that focuses on the hard and soft skills of sourcing, including strategic sourcing and outsourcing methodologies, as well as best practices in negotiations.

 

Daniel Coggins, Strategic Sourcing team, American Tire Distributors

My name is Daniel Coggins and I have worked in Sourcing for my entire career thus far. I graduated from NC State University with a degree in Supply Chain Management. From there, I was with IBM for 3 years as I worked on the Sourcing Consulting team. I gained valuable skills in how to really provide the best possible results, value, analysis, and reporting to the client. Those skills have served me well as I am now on the Strategic Sourcing team at American Tire Distributors, located in Charlotte, NC. I support our IT organization with sourcing of Hardware, Software, Telecom, Digital Marketing, and Services related needs.