We provide objective procurement research and analysis on indirect categories for you:
-Develop and implement an integration process to accelerate your success
-Increase the cooperation and collaboration among stakeholders to ensure attainment of goals.
Procurement Research In the Seven Step Procurement Process
Sometimes the procurement process can be challenging – Especially when we are confronted with a spend category that we have not sourced before or its been a while.
Here are the 7 steps to a successful strategic sourcing event that utilizes procurement research as part of it’s underlying planning and execution.
Step 1. Demand planning and needs analysis.
Demand planning allows a procurement team to evaluate their existing spend to identify needs and requirements throughout the organization.
Collecting data is critical in this phase. It allows a procurement team to benchmark it’s current performance, evaluate what resources it is using, and look at targets for the organization.
Procurement research allows that same team to identify categories to address, and determine what areas of spend they may be able to approach more strategically.
Using category taxonomy in addition to objective procurement research starts to fill in some of the blanks, and gives team the opportunity to determine which way they are heading.
An objective perspective of the market from third party research providers offers a second set of eyes.
The team can then begin to look at the next steps of the strategic sourcing process.
Step 2. Evaluating the supplier’s market and assessing potential opportunities.
Using procurement research and analysis allows a procurement team to identify potential suppliers that are good sources for the products and services that they are looking to acquire.
Being subjective in this step of the procurement process can be costly. A deep-dive into the category will give you an upper hand when evaluating the potential partnerships. Procurement research reports offer insight that helps you to identify and vet potential suppliers.
Step 3. Collecting supplier information.
Getting details from the your supplier partners regarding their services and capabilities is one thing, but more research will be necessary to mitigate risk throughout your supply chain.
It can be catastrophic to partner with a supplier or vendor that cannot meet the technical requirements of the strategic sourcing event.
Even worse, there may be other details surrounding the supplier’s financial statements, credit reports and references that could have negative consequences for your buying organization.
Overall, using procurement research to investigate your suppliers gives you a complete picture of what’s happening in each spend category.
Step 4. Developing a strategic sourcing/outsourcing strategy.
The first three steps provide the roadmap for your team to begin to build your strategic sourcing strategy.
There are many strategies out there. Procurement research provides the definitive answers that you are looking for when approaching your sourcing event.
Every industry is unique. The needs and requirements of your business may be very different when sourcing a product or service. It is important to develop a ‘story’ that is unique to your business requirements to help you to get to where you are going.
Using objective procurement research can help you to see the end goal. Unlike a a long term plan, a sourcing strategy is designed to work backwards to take the right next action steps which makes analysis into the category critical. It is your vision.
Step 5. Into Action. Implementing your sourcing strategy.
An acquisition or strategic partnership is a major undertaking. Stepping outside of the core activities in purchasing is the first step. You want to use procurement research as a leverage tool to achieve your desired goals and objectives.
It is also important to consider the business itself. Does our strategy align itself to the outcomes that our internal business partners are looking to achieve? Procurement research helps to get everyone on the same page and encourages collaboration because there is now an objective perspective in the equation.
Cost reduction goals are one thing, and using leverage opportunities such as bundling are commonplace in most procurement organizations, but it’s also very important to consider what is best for the business in the long term.
Procurement research helps to put things in perspective by giving you the right resources to make strategic decisions that may impact your organization 5 or 10 years down the road.
Step 6. Negotiations with your suppliers and vendors.
Negotiations are not meant to adversarial. In fact, a successful negotiation should be quite the opposite. Having a third party resource such as procurement research puts all the cards on the table.
When you are truly an expert in the category, you are able to have more meaningful conversations with your suppliers to achieve the best outcomes. Using procurement research prepares you for those negotiations by giving you an expert view into the category.
Sharing the research and analysis that you have gathered with your supplier partners not only demonstrates that you are well-versed in the spend category, but it also levels the playing field by giving both parties the facts surrounding the negotiation.
Step 7. Developing and then implementing improvements with your supplier partners.
Once you have partnered with your new supplier, you want to nurture that relationship and make constant improvements.
Preparing your team for these process improvements can be easily achieved with procurement research and analysis that gives you the information to create more valuable relationship with your supplier base.
It is important to continue to investigate each category and be aware of what factors could contribute to any changes.