The Digital Supply Chain Company

Going for Gold – Mining Indirect Spend and Services

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Posted by on Thu, 02/22/2018

It’s early in the year and as we embrace the “Gold” with the Winter Olympics, we often hold persistence and excellence themes in pursuit of procurement savings. Anyone who has worked in the indirect/services area in companies with a procurement organization, knows persistence is a trait that one needs to embrace and influence change. Excellence is the professionalism that procurement leaders execute daily to deliver savings. 

If you’re like most organizations, you most likely have scanned the 2017 data, and have discovered several targets to pursue for 2018 savings initiatives’. However, we know heavy lifting is essential for enterprise wide savings opportunities, as well as plant leadership support of local projects where displacement of incumbent suppliers can impact the organization.

The key to success of any effort is the data and collaboration with the subject matter experts (SME’s).  Critical to the data is the actual supplier performance vs. the perceived performance. Depending on the level of performance is the cost of change to obtain the savings worthy of the effort. Supply chain continuity is important to the business, and any perceived or actual disruption can cause harm to the business. Therefore, the planning and selection of targets of opportunity require detailed planning.

Planning and Execution in Procurement

Procurement professionals are not deterred, nor are Olympic athletes in the quest for gold. We all start with an aspirational target, and then put together a plan to achieve the goals. Critical in the process is the planning and execution. You will find that in both the Olympics and procurement the opponent to success is time.  Procurement professionals are always racing a clock of execution and delivery.

Unfortunately, there are no short cuts to success in either the Olympics or procurement to deliver.  However, we know that training tips, and coaches go a long way to achieving favorable outcomes. When we look at the Indirect expenditures in any organization we know the difficulty in achieving the best buy from the best suppliers. If you:

  • Focus on the data
  • Manage the supply chain
  • And measure your improvements

the value received can be very positive for an organization. We feel that focused priorities in the indirect/MRO services continues to be a race that needs observation. A disciplined approach including purchased data, supplier performance and management can yield savings directly impacting the bottom-line. 

Sprints on high spend targets can yield quick results, and as discipline is added to daily routines, other areas found in a cross-country race, will be identified and acted upon as resources allow. The discipline of the Olympics provides examples of training and planning. Great negotiations don’t come in the heat of the moment, but with planning and execution.          

The SDI Approach

Our methodologies at SDI support a Six Sigma approach to category management, data analysis, planning and execution for expenditures of MRO parts and services. We can coach and collaborate with your organization to deliver the savings –achieving your goals today and in the future.              

Be inspired to start the training and plan the execution to deliver the “Gold” in your procurement savings goals. We can coach you, contact an SDI expert today.

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