| SCDigest Says:
|New procurement skill sets are often required to really benefit from many of these strategies. For example, new decision frameworks and tools are often required when moving to strategic sourcing paradigms where “small number” supplier decisions must be made.
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Purchasing managers have an increasing array of tools and “best practices” that can be leverage to reduce costs and increase procurement effectiveness.
Below is a list of 10 comparatively new approaches to procurement and sourcing companies can consider in their tool kits. The reality is that a growing number of companies have embraced many of these techniques, and that they are becoming increasingly “mainstream.”
1. e-Auctions: Any one of a number of “reverse auction” electronic bidding approaches conducted over the web.
2. E-Procurement Systems: Web-based transactional purchasing systems designed to automate the procurement process and move to a paperless operation, reducing the cost per purchase order.
3. Spend Visibility/Analysis: Analytic tools designed to control renegade spending and highlight opportunities to better consolidate or leverage purchasing power.
4. Global Sourcing: Identification, qualification, and consideration of suppliers across the globe, especially in low-cost countries.
5. GPO (Group Purchasing Organization): Entity or association that pools volume from multiple companies and negotiates better rates with suppliers than each company could do on its own.
6. Longer-Term Contracts: Master, or umbrella, contracts or other agreements structured to extend a special commitment to a supplier. Usually 3-10 years in duration.