The Next Wave of Savings
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| The Next Wave of Savings by Dave Bush September 2, 2007 | Go Back |
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Back in August I summarized some of the key points from the CPO Agenda debate on Global Sourcing - A Scandinavian View that was run in their Summer 2007 issue. This was followed by a summary of the Where Do You Look For the Next Wave of Savings? debate that is available on the website where CPO Agenda invited a group of leaders from Belgium and the Netherlands to share their thoughts on the subject in Amsterdam.
The debate included Paul Bestford of Wyeth, Phillippe Courregelongue of EMEA/Emptoris, Francoise Demanet of Fortis, Dominique Gardy of Royal Dutch Shell, Jacqueline Hoogerbrugge of Numico, Dimitri Huyghe of Accenture, Steve Mallaband of InBev, John Tros of Delta Lloyd, and Benno Lutje Wagelaar of Essent. As with the last post, I am going to summarize some of the key points from each contributor.
Paul Bestford
Take money out of areas of the business that aren't particularly productive and invest in areas that are. Focus on process outsourcing - off-shoring to low cost countries while driving consistency of process on a global scale.
Phillippe Courregelongue
There's the maturity of the organisation doing auctions and the degree of comfort they have with the tool they use; and there's the complexity of a tender for particular markets. It's really matching these two. Embrace more holistic, broader supply management solutions so that the value created during negotiation can be captured via more effective contract management, supplier performance and compliance management solutions.
Francoise Demanet
Value engineering and demand management.
Dominique Gardy
Category management is ... key in delivering the value from contracting and procurement. Align with suppliers at global, regional and local levels. Optimize sourcing based on planned demand, develop some intimate relationships with suppliers to really understand cost build-up and long-term sustainability of supply. And look forward to what you expect to buy in the years to come.
Jacqueline Hoogerbrugge
Do supplier development for the long term and collaborate with suppliers. Use a multi-disciplinary company-wide program for cost savings that works with product development and manufacturing.
Dimitri Huyghe
It's not only about spend data, but ensuring that the analysis is transparent and that the strategy for a certain category is clear. Also, do your homework before you start collaboration.
Steve Mallaband
First you have to secure your supply, then you can work to reduce your costs. Then better adherence to process, clearer specifications, better structure ... that gives you better results.
John Tros
Don't be afraid to bring in suppliers from other countries. Also, it's not only about getting cost down, it's also about making the process more transparent for your clients. And it's agility.
Benno Lutje Wagelaar
Invest heavily in procurement people and tools to make sure you are in front of the trends and ready when the pressure increases.
In summary, do your homework, understand demand, source key categories on their own, focus on securing supply and mitigating risks, invite the right suppliers, collaborate, aim for long(er) term relationships, use process and strategic sourcing tools (spend analysis, e-RFx, e-Auctions, decision optimization, and contract management), use third parties as appropriate, be agile, invest appropriately, and have the right people. Still sounds right to me.
