SIG University Certified Sourcing Professional (CSP) program graduate Heather Frazer discusses how TCO is a great tool that will help capture the entire potential for cost savings and risk and how it is increasingly important for procurement organizations to secure reliable data.
Heather Frazer, Procurement Specialist, Blue Cross Blue Shield of Tennessee
To wrap up 2021, we highlight the top 10 SIG Speaks blogs of the year. From sustainable sourcing to McDonald's happy meals, this year we have brought a range of content to fuel your procurement toolkit for the future of the industry!
Women's History Month Spotlight
SIG celebrates diversity and inclusion by highlighting the professional contributions of SIG members for Women's History Month. Here is a round-up of our favorite women authors over the last year to feature!
The Future of Procurement and the Shifting Supply Chains
As we reflect on 2020, the future has to be about possibilities to reshape our supply chains, with lessons from the past unifying ideas to accelerate the recovery and reset needed – for defining the future of work, a thriving planet and equality for all.
Procurement leaders have emerged from the pandemic stronger and smarter thanks to the recent development of next-gen tools such as AI and automation to support strategic goals and build resilient organizations.
To explore this technology in the evolving role of procurement leaders, Sourcing Industry Group (SIG) recently brought together Kate Seagriff, Director of Strategic Sourcing at TripActions, and Aurelie Krau, Travel Consultant at Festive Road, to discuss the topic with SIG President and CEO Dawn Tiura.
The webinar "Building Resilient Procurement Organizations with Travel & Expense Technology" pushed the audience to reexamine whether they have the tools to scale business growth, gain real-time visibility on spend, and show value by driving continuous improvement.
The Evolving Relationship Between Procurement and Technology
As the panelists explained, procurement functions are becoming the cornerstone of organizations as cross-business optimization and efficiencies grow in importance. The role of spend analytics and the procurement function has further shifted against the backdrop of a changing global economy influenced by the fourth industrial revolution, the localization of the value chain, and increasing consumer demands from mass customization and personalization.
Whether your company’s focus is to build smart applications or update mobile apps for end-users, to increase intelligence using advanced algorithms, or to look at opportunities to automate internal operations to drive high-value outcomes, there’s no denying that digital plays an increasing role in everyday operations of companies across all verticals and sizes.
As companies worldwide push to drive digital transformation, procurement leaders are being challenged to strategically influence spending, amidst a global climate full of talent scarcity and the need for immediate cost optimization.
Through a strategic partnership with Fossil, we helped the executive leadership team to increase quality, productivity and utilization as they moved from working with a 300-person offshore team to a 180 person Global Insourcing Center “GIC” team through our unique offshore model.
A US-based, vertically integrated global retail and manufacturing company that specializes in a diverse portfolio of lifestyle accessories. This industry powerhouse operates an extensive brand portfolio and a wholesale distribution network across 150 countries and 500 retail locations.
The company had an extensive outsourcing presence in India for years but recently had been adversely affected by cost overruns, under-performing contractors, and poor resource management processes. All were creating a significant drag on productivity and profitability and distracting from the core focus of being a fashion trendsetter and market innovator.
The objectives established for the outsourcing operation were not in dispute. The culprit was the deteriorating execution. The company wanted to regain control in its approach to outsourcing.
After extensive evaluation, the company partnered with SMC Squared to strategically “right-source” the execution.
Patricia Connolly, CEO and Co-Founder, SMC Squared
SIG University Certified Sourcing Professional (CSP) program graduate William DeMarzo shares his perspective on the old sourcing cliché “don’t leave money on the table."
In our SIG University CSP course, we learned the benefits of “leaving money on the table” as this negotiation style builds trust, transparency, and a collaborative relationship with suppliers. Yet, the concept of leaving money on the table seems to be taboo in today’s business environment. Nine of the top ten hits from a Google search of the phrase are articles about why it’s a bad idea, a sign of weakness, or otherwise poor choice to do so. Perhaps this is more a sign of a zero-sum society than a negotiating strategy, but that’s a topic for another essay.
Let’s be clear that there are many business transactions where it is appropriate to pay the lowest price for a product or service. For example, products that have defined specifications, from a #2 pencil to a powerful server, or a service that has a measurable deliverable, should be sourced at the lowest price in the market. But when is leaving money on the table a good strategy?
William J. DeMarzo, Sr. Director, The Bank of New York Mellon
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:
In early December 2020, Google published its trends for 2020, listing the top searched terms, people, news stories and more. It is no great surprise that "Coronavirus" was the top searched term and news story. Nor that Tom Hanks, Kobe Bryant or Kamala Harris were high on the list. What I found remarkable is that these trends were not reflected in the top searched terms for SIG's website in 2020. In fact, it was business as usual on our website. Sure "COVID" and "resiliency" and "remote work policies" made the list. Website traffic and searches increased in volume, but our visitors were searching for the same topics and downloading some of our best case studies for help.
Here's just a short snapshot of some of the trending searches in 2020:
Most sourcing professionals know what category management is and a critical mass of our members practice category management at varying levels of maturity. This SIG blog summarizes our resources in one location and is one of our most visited pages. Members frequently download our Template for Building a Business Case for Category Management.
Mary Zampino, Vice President – Content, Research & Analytics
To wrap up 2020, we highlight the top 10 SIG Speaks blogs of the year. From sustainable sourcing to mastering the art of negotiation, this year has been filled with thought leadership to help weather the COVID-19 pandemic.
The Guide to Understanding Category Management
By drilling down on spend categories, procurement can become established as a trusted advisor to the business. Check out our guide for a category management template to build your business case.
SIG University Certified Sourcing Professional (CSP) program graduate Angelica Gardner discusses how CSP modules on internal spend analysis and contract negotiation planning improved her approach to identifying cost efficiencies as a procurement buyer.
As everyone is aware, the COVID-19 pandemic has affected a large portion of the economy’s growth ability, especially in the automotive industry, with declining sales of more than 40%. Companies are having to develop strategic ways to cut costs and provide cost-saving solutions. As a buyer in the manufacturing plant, my responsibility is to identify these cost efficiencies.
To accomplish this task, SIG University's CSP program helped me recognize two areas to improve: internal spend analysis and contract negotiation planning. These areas are complementary skills that have helped me improve my approach these types of situations in the future as a procurement buyer.
INTERNAL SPEND ANALYSIS
As a new procurement agent, having followed industry market trends, company earnings and announcing changes within the organization has given me a leg up in my negotiation strategies. Assessing the environment is vital to understanding business requirements, the company’s vision and our department’s functional goals during this critical time.
In one particular situation, management did not agree with a supplier’s new budget proposal and wanted to reduce cost by an overall savings of $86,000. The lesson teaches us to gather as much data required and perform a spend analysis to determine leverage. After completing a spend analysis from the previous year, we discovered the total spend was consistent with what was done in the past.