Procurement and Strategic Sourcing Presentation preview
Title Slide preview
Procurement Slide preview
Procurement Objectives Slide preview
Procurement Objectives Slide preview
Vendor Management Process Slide preview
Supply Chain Management KPI Slide preview
Procurement Suppliers Compliance Slide preview
Quarterly Procurement Map Slide preview
Six-Month Procurement Map Slide preview
Strategic Sourcing Slide preview
Procurement vs. Strategic Sourcing Slide preview
Scope of Strategic Sourcing Slide preview
ADVANTAGES OF STRATEGIC SOURCING Slide preview
Stages of Strategic Sourcing Slide preview
Stages of Strategic Sourcing (Cont.) Slide preview
Strategic Sourcing Process Slide preview
Strategic Sourcing Process: Step 1 Slide preview
Strategic Sourcing Process: Step 2 Slide preview
Strategic Sourcing Process: Step 2 Slide preview
Strategic Sourcing Process: Step 2 Slide preview
Strategic Sourcing Process: Step 2 Slide preview
Strategic Sourcing Process: Step 3 Slide preview
Strategic Sourcing Process: Step 3 Slide preview
Strategic Sourcing Process: Step 3 Slide preview
Strategic Sourcing Process: Step 4 Slide preview
Strategic Sourcing Process: Step 5 Slide preview
Strategic Sourcing Process: Step 6 Slide preview
Strategic Sourcing Process: Step 6 Slide preview
Strategic Sourcing Process: Step 6 Slide preview
Strategic Sourcing Process: Step 7 Slide preview
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Synopsis

Procurement can be tough to handle, as lack of internal communication, obscure focus and failure to streamline the process often stand in the way. This is why we developed the Procurement and Strategic Sourcing presentation so you can create an action plan to achieve procurement objectives and improve areas of implementation. Also, to get ahead, learn how IBM is successfully reimagining its procurement systems.

Questions and answers

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The presentation does not specifically mention any case studies demonstrating its effectiveness. However, it does mention that IBM is successfully reimagining its procurement systems, which could be seen as an indirect case study. For more specific case studies, you may need to look at other resources or directly contact the organizations that have implemented the strategies outlined in the presentation.

The Procurement and Strategic Sourcing presentation can be practically applied in the procurement industry in several ways. Firstly, it can be used to develop an action plan to achieve procurement objectives. This could include setting clear goals, identifying key performance indicators, and outlining strategies for achieving these goals. Secondly, it can be used to improve areas of implementation. This could involve identifying areas where the procurement process is not working effectively and developing strategies to improve these areas. Lastly, it can be used as a tool for learning and development. For example, procurement professionals can learn from IBM's successful reimagining of its procurement systems.

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Slide highlights

With this slide, communicate your procurement objectives. Some examples are: supporting operational requirements, managing the supply base efficiently and effectively, cost savings and risk mitigation, as well as talent development.

Procurement Objectives

Use this slide to cover your supply chain management Key Performance Indicators (KPIs). These may include cash-to-cash time cycle, inventory turnover, Gross Margin Return On Investment (GMROI), freight bill accuracy and on-time shipping.

Supply Chain Management KPI

Mapping out your procurement processes helps to gain greater supply chain visibility and identify potential threats and avoid them. With this slide, introduce your procurement map and walk your team and stakeholders through the strategy.

Six-Month Procurement Map
ADVANTAGES OF STRATEGIC SOURCING

Application

Procurement and sourcing are two related, but different terms that are often used interchangeably. The main difference between them is that sourcing concentrates on direct goods and services and procurement deals with indirect goods and services. EPS News suggests this seven-step model for applying strategic sourcing principles to modern procurement:

Questions and answers

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The procurement and strategic sourcing process aligns with overall business objectives in several ways. Firstly, it helps in cost management by identifying the most cost-effective suppliers and products. Secondly, it ensures quality control by setting standards and requirements for suppliers. Thirdly, it aids in risk management by evaluating and monitoring supplier performance and reliability. Lastly, it supports innovation and improvement by identifying new suppliers and products that can enhance business operations.

Challenges during the procurement process can include: lack of clear specifications, inadequate supplier research, poor communication, and lack of a well-defined process. These can be addressed by: ensuring clear and detailed specifications are provided, conducting thorough research on potential suppliers, maintaining open and clear communication with all stakeholders, and having a well-defined and structured procurement process in place.

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  1. Procurement plan – select your team and begin with a project kickoff. It's important to collect your current analysis of the industry, customers and suppliers and determine procurement expenditures before moving on to the next step.
  2. Supply market analysis – when you gather data, consider both team members and stakeholders and their priorities, which secure more guidance for you in the future. "Issue detailed requests for this data from stakeholders and suppliers as needed to create a unified document," the experts say.
  3. Develop a strategy – when you gather data, consider both team members and stakeholders and their priorities, which secure more guidance for you in the future. "Issue detailed requests for this data from stakeholders and suppliers as needed to create a unified document," the experts say.
  4. Requirements and evaluation criteria - pinpoint the requirements for your suppliers and determine how they'll be evaluated. For example, service, quality, transparency, delivery time and total unit cost.
  5. Implement - indicate the required activities to implement the contract, such as a work plan, communication strategy and benchmarking.
  6. Review and establish areas for improvement - once you've established the basis for a strategic sourcing framework, the experts point out, there will always be opportunities for improvement. "Maintaining suppliers relationships is key but being aware of potential risks and revisiting the strategy annually are also essential elements of your ongoing success," they say.

Case study

IBM

IBM posted a Procurement Transformation case study on its website to show how the company is reimagining its own procurement systems. "With operations in over 170 countries and over 13,000 suppliers, procurement has always been the lifeblood of IBM. However, long-entrenched processes and siloed data across this heavily matrixed organization were leading to frustrations with the procurement process. IBM needed an updated approach to their procurement capabilities," IBM shares. At some point, the company had to figure out whether it had competitive pricing, as well as what the target prices for an in-flight deals were and the way to manage non-core transactions.

Questions and answers

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Procurement solutions like master data management, analytics and insights, sourcing and contracting, content management, order management and helpdesk and payables can have various practical applications in different industries. For instance, in the manufacturing industry, these solutions can streamline the supply chain, reduce costs, and improve efficiency. In the healthcare sector, they can help in managing medical supplies, reducing costs, and improving patient care. In the retail industry, these solutions can help in managing inventory, reducing overstock and stockouts, and improving customer satisfaction.

Other companies can implement similar procurement solutions to achieve cost reduction by adopting the following strategies:

1. Master Data Management: This involves managing the organization's data as a single coherent system. It helps in reducing errors and improving efficiency.

2. Analytics and Insights: Use data analytics to gain insights into spending patterns and identify areas for cost reduction.

3. Sourcing and Contracting: Establish strategic relationships with suppliers to negotiate better prices.

4. Content Management: Efficiently manage procurement documents to reduce time spent on administrative tasks.

5. Order Management: Streamline the order management process to reduce delays and errors.

6. Helpdesk and Payables: Implement a helpdesk to resolve procurement issues quickly and efficiently manage payables to avoid late payment fees.

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After these puzzles were solved, the IBM team came up with the following procurement solutions: master data management, analytics and insights, sourcing and contracting, content management, order management and helpdesk and payables. The new procurement process allowed IBM to deliver $67 million in savings in the first year, reduce procurement costs by 13% and achieve an immediate four-point improvement in Net Promoter Score (NPS).

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