SIG University Certified Sourcing Professional (CSP) program graduate Nick Fratto describes how sourcing professionals must adapt to a post pandemic industry and how to find the perfect supplier's for your business.
Nick Fratto, Sales Enablement Specialist, Sourcing Industry Group
SIG University Certified Sourcing Professional (CSP) program graduate Sergio Mielnik shares an in-depth understanding of how supplier relationships should be managed and how improving supplier relations at different levels will create successful sourcing engagements.
Throughout the certification, a constant emphasis on supplier relationships and the guidance provided to use these relationships as drivers to successful sourcing engagements. Suppliers are critical drivers of your pricing, delivery, strategy, and forecast. I have engaged suppliers from sole-source, directed, competitive, non-competitive, and management sources. Each situation has been unique, but I have treated all suppliers with the same level of communication and collaboration.
As supply chains get tighter and more competitive, it is essential to keep those communication channels to create a personal approach rather than a solely monetary exchange approach. This does not mean you hand out the keys to your supplier, but if this could happen, you can trust the relationship developed to obtain solutions and drive success.
Managing suppliers at different levels, whether critical or non-critical, is another topic that I found interesting. The relationship between a “ma and pa” shop versus a top-tier conglomerate is not the same. Still, you must strive to find that personal connection with different types of companies, provide fairness in your approach, and understand each supplier’s competitive advantages. I have often found myself waiting in line with top suppliers, which affects our delivery and production schedules.
Sergio Mielnik, Lead Business Risk and Controls Advisor, USAA
The concept of sustainable sourcing, also known as green purchasing or social sourcing, is nothing new. Sustainable sourcing is impacting nearly every area of corporate business and the consumer’s mindset. Everything from sourcing materials, talent attraction and consumer purchasing habits is changing because of sustainable sourcing growth. However, the term gets thrown around in the procurement industry quite often and is often misunderstood or misused. So, here’s a guide with all the basics you need to know about sustainable sourcing.
WHAT IS SUSTAINABLE SOURCING
First and foremost, we have to define the term. Sustainable sourcing is the integration of social, ethical and environmental performance factors into the process of selecting suppliers. It includes purchasing sustainably preferable products and services (products made from recycled or remanufactured materials), as well as green purchasing guidelines that might pertain to certain products or commodities.
The term “tail spend” has become a common term in procurement-speak because in our minds we like to visualize all of our spend fitting on a nice curve with suppliers on the X-axis and spend per supplier on the Y-axis, something like in Figure 1 below. The suppliers with the lowest spend are plotted to the right and we think of that as the tail. A shorter tail implies we’ve done a better job of consolidating our spend among fewer suppliers. Since supplier consolidation with the goal of cost savings was the raison d’etre of early sourcing groups, the shape of this curve feels like an indicator of success.
Amy Fong, Vice President - Sourcing and Vendor Management, Everest Group