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Managing Indirect Spend: Enhancing Profitability Through Strategic Sourcing by William R. Dorn, Joe Payne

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CHAPTER NINE

What Not to Do During a Strategic Sourcing Initiative

EARLIER IN THIS SECTION we covered the basics of the strategic sourcing process and how to maximize your savings opportunities using proven best practices. However, many procurement professionals begin to skip steps or take shortcuts in their sourcing initiatives due to a variety of reasons, including constraints on their time or because they feel that the spend category is not critical to their business.

The number one mistake that many companies make is getting caught up in documented preestablished sourcing or request for proposal (RFP) process without allowing for any creativity or flexibility in the individual sourcing events. This usually happens when an organization develops a formalized sourcing plan, with formal documents, then trains new sourcing professionals on the process while neglecting to add creativity and flexibility into each individual sourcing event. This section discusses what not to do during a strategic sourcing initiative.

CREATING OVERLY COMPLEX OR LONG RFPS

The easiest way to guarantee higher prices and a smaller potential supply base is to engage potential suppliers with an overly complicated or lengthy request for proposal or request for information document or process.

To provide some insight into this phenomenon, let us examine the example of a state transportation department that recently requested that our consulting firm participate in an RFP. In this example, our firm was asked ...

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