SC managers need to find new ways of restraining spend
June 9, 2011
by Purchasingb2b Online
WHISTLER, BC: Procurement managers need to reconsider how they are doing business, says Patricia Moser, vice-president of supply chain at Grand & Toy.
Moser’s presentation at the PMAC national conference, Reaching New Peaks, today in Whistler, BC, offered a packed room a lively overview of methods they can use to continue offering more value and savings to the corporations they work for.
Procurement managers have only so many levers they can pull in trying to get the best deals, she says. To avoid getting into adversarial relationships with suppliers, it’s important to re-think how RFPs are presented and to look for different methods of getting what is asked for.
The levers that Moser advocates procurement managers adopt are framed around six pillars:
• Demand management / demand shaping
• Process streamlining
• Spend disaggregation
• Compliance and risk mitigation
• Volume and supplier consolidation
According to Moser, it’s time for procurement managers to put their foot down and ensure employees comply with contracts rather than engaging in rogue spending. According to a DNA analysis that Grand & Toy conducts on behalf of its large and enterprise clients, some 38 percent of spend is off contract.
Everybody should be asking their suppliers for a service like this, Moser said. It allows you to see metrics like order sizes, distribution costs and to find alternate methods of ordering to increase efficiencies.
“Never think for a moment, just because it’s invisible doesn’t mean it isn’t costing you money.”