Managing Indirect Spend Enhancing Profitability through Strategic Sourcing

by Payne, Joe; Dorn, William R.; Pastore, David; Ulrich, Jennifer

• ISBN13: 9781119762348
• ISBN10: 1119762340
• Edition: 2nd
• Format: Hardcover
• Copyright: 2021-06-09
• Publisher: Wiley

Summary

Managing corporate spend is far more complex than conducting RFPs. Learn how the most efficient and effective procurement departments operate, control costs, enforce compliance, and manage indirect spend.

Managing Indirect Spend provides executives and procurement professionals with the knowledge and tools necessary to successfully reduce costs with a strong focus on the often-overlooked area of indirect spend. It also offers great value to those procurement and purchasing professionals aspiring to be leaders in the profession, regardless of the spend they manage. It includes an overview of the challenges faced when sourcing indirect spend categories, a detailed dive into the strategic sourcing process, tools that can help drive savings, technologies that drive efficiencies and compliance, and examples of success based on real-world experience. It is a how-to guide that clearly covers sourcing engagements of any complexity and provides the details needed to source effectively. The book is structured into sections covering the sourcing and procurement process, the tools and technologies, examples from the field, walkthroughs of specific sourcing engagements, guidance on building an effective sourcing team, and the information needed to become a best-in-class sourcing organization.

Since the initial publication of this book, the procurement profession and the discipline of Strategic Sourcing have matured. Markets have changed, processes developed, trends have come and gone, and technology has experienced leaps and bounds, posing new and interesting challenges for procurement professionals. In addition to covering tried-and-true practices for strategic sourcing, this Second Edition discusses how strategic sourcing has evolved and provides an update on the techniques, tools, and resources available to purchasing groups. This book:

• Includes updated coverage of everything you need to know to source more effectively
• Covers the latest trends in procurement and sourcing, including technology, process improvements and organizational design
• Presents guidance for reducing costs through strategic sourcing, no matter what the economic climate or level of maturity of the existing procurement organization
• Shows how effectively managing indirect costs can provide a huge impact on bott
• m line growth
• Introduces Market Intelligence (MI), including techniques, tools, and resources available to procurement and supply chain management groups

With tools, real-world examples, and practical strategies, Managing Indirect Spend provides insider guidance for big bottom-line growth through effective management of indirect costs.

Author Biography

Joe Payne, Senior Vice President, Source-to-Pay, Corcentric, oversees the delivery of both services and technology solutions to help companies elevate the role of procurement. He is a sourcing and procurement expert and has spent his entire career working with many different companies, ranging from mid-sized and large companies to the Fortune 100, to optimize their sourcing and procurement strategies. As a strategic sourcing consultant, he has worked to identify a company’s unique sourcing needs, identify optimal areas for improvement, and ensure a tailored approach that drives performance improvement.

William R Dorn, Jr., Vice President of Strategy, Upstream Product Management at Corcentric, is responsible for driving the end-to-end product vision and execution of Corcentric's Source to Contract Solutions portfolio. He is a process improvement and technology expert specializing in strategic sourcing.

David Pastore, Senior Director of Sourcing Operations, Corcentric, is supported by a multidisciplinary team of category SMEs and procurement professionals in ensuring Corcentric's clients achieve their financial and operational objectives through Strategic Sourcing best practices. He is a strategic sourcing subject matter expert and thought leader, specializing in complex spend categories. He leverages his experience in the marketplace to help his clients save money while maximizing their agility in a today’s dynamic business environment.

Jennifer Ulrich, Senior Director, Source One, Corcentric, is recognized industry-wide as an authority on Procurement, Finance, and Digital Transformation and Category Management. she has led large-scale initiatives for both direct and indirect spend categories in industries including: biotech, medical devices, pharmaceuticals, and consumer packaged goods. Her clients trust her to provide the cross-functional procurement knowledge and innovative strategies necessary to develop transformation roadmaps and realize long-term savings. Her efforts have also included developing customized training programs for strategic sourcing, contracting and negotiations, spend analytics, procurement process redesign, and supplier relationship optimization.

Table of Contents

Introduction

Part One: The Process

Chapter One: An Introduction to Strategic Sourcing X

Visibility X

Objectivity X

Project Management Tool X

In Summary X

Chapter Two: Data Collection and Spend Analysis X

What Is Data Collection? X

Where to Start? X

Dealing with Decentralized Data Sets X

Spend Analysis X

Spend Analysis Tools X

Kicking Off the Projects X

End-User Interviews X

Line-Item Detail and Getting the Most from Your Supply Base X

Supplier Interviews X

Analyzing Contracts and Pricing Agreements X

The Final Analysis: Building a Baseline X

In Summary X

Chapter Three: Conducting Research X

Types of Cost-Savings Opportunities X

Understanding the Category X

Identifying Suppliers X

Understanding the Supply Chain X

Understanding Current Market Conditions X

Understanding the Factors of Cost X

Review of Technologies, Processes, Products, and Services X

Collecting Market Intelligence Through the RFI Process X

In Summary X

Chapter Four: The RFX Process X

Using the RFI to Begin the Sourcing Phase X

Developing Your Sourcing Strategy X

Going to Market X

Generating the RFP and RFQ X

Supplier Selection and Scorecard Criteria X

Administering the RFX Process X

Reverse Auctions X

Alternatives to the RFX—The Importance of Flexibility and Creativity in the Sourcing Process XX

In Summary

Chapter Five: Scorecarding Suppliers X

Measuring Value: Developing Selection Criteria X

The Quantitative Analysis: Evaluating the Bid Portion of Supplier Proposals X

The Qualitative Approach: Developing the RFP Matrix X

References X

Teamwork and Objectivity X

Technology’s Role X

In Summary X

Chapter Six: Negotiations X

Knowing What to Negotiate X

Negotiation Optimization: Developing Final Targets X

Getting to “No” XX

What Not to Do XX

In Summary XX

Chapter Seven: Get It in Writing X

The Contracting Phase X

Essential Components of a Contract X

Attachments XX

Contract Management XX

Making the Best Use of Your Legal Team XX

Contracting Pitfalls and Language to Avoid XX

Working Outside of a Contract: Pricing Agreements and Handshakes XX

In Summary XX

Chapter Eight: Implementation and Continuous Improvement X

The Challenges of Implementation X

Overcoming Challenges X

Monitoring Improvements After Implementation X

Savings and Compliance Best Practices XX

Continuous Improvement Initiatives XX

In Summary XX

Chapter Nine: What Not to Do During a Strategic Sourcing Initiative X

Creating Overly Complex or Long RFPs X

Letting the Supplier Write the RFP for You X

RFP Spam X

In Summary XX

Part Two: The Tools

Chapter Ten: The Importance of Market Intelligence X

The Types of Market Intelligence X

Components of Success X

Breaking Down the Components XX

In Summary XX

Chapter Eleven: Introduction to Procurement Technology X

A Brief History of Procurement Technology X

The Solution Landscape X

Upstream and Downstream Procurement X

Spend Analysis X

Sourcing X

Reverse Auctions XX

Contract Lifecycle Management (CLM) XX

Supplier Information Management (SIM) XX

Supplier Performance Management (SPM) XX

Supplier Risk Management (SRM) XX

Procurement (PXP) XX

Invoicing and Payment XX

SXP Individual Products Versus Full-Suite Solutions XX

In Summary XX

Chapter Twelve: Increasing Stakeholder and Supplier Engagement X

What Is a Stakeholder? X

Who Are the Stakeholders? X

The Value Brought by Stakeholders X

In Summary XX

Chapter Thirteen: Leveraging Group Purchasing Organizations X

Types of GPOs X

Services Provided by GPOs X

Benefits of GPOs X

GPO Disadvantages X

Best Practices for Managing GPO Relationships XX

Summary XX

Part Three: Examples from the Field

Chapter Fourteen: Supplier Collaboration X

Opening Up Your Requirements X

Giving Suppliers What They Need X

Helping Suppliers With Their Supply Chain X

Collaborating With Suppliers in Similar Industries X

In Summary X

Chapter Fifteen: Leveraging Supplier Feedback X

Avoiding the RFP Process X

Making Yourself the Ideal Customer X

Examples of Leveraging Supplier Feedback Successfully X

In Summary X

Chapter Sixteen: Opportunity Assessment and Sourcing Roadmap X

Introduction X

Starting with Spend Analysis X

Procurement Taxonomy X

Opportunity Assessment X

Roadmap XX

In Summary XX

Part Four: How to Do It—Sourcing

Chapter Seventeen: Determining Project Complexity X

Complexity Drivers X

In Summary XX

Chapter Eighteen: Planning and Optimizing Low-complexity Projects X

Getting Familiar with Low Complexity X

Where to Find Low Complexity Projects X

Dealing with Unexpected Complexity X

Adding Complexity with Purpose X

Factoring Low-complexity Projects into Your Roadmap X

In Summary X

Chapter Nineteen: Navigating High-Complexity Projects X

Process Drivers X

Project Drivers XX

In Summary XX

Part Five: How to Do It—Building and Managing an Indirect Procurement Team

Chapter Twenty: Building an Indirect Procurement Team X

Defining the Role of Procurement X

Designing the Framework X

Building the Team XX

In Summary XX

Chapter Twenty-One: Team Training and Development X

Where to Begin X

Balancing the Content X

How to Make It Stick X

In Summary X

Chapter Twenty-Two: Process, Policy, and Digitalization X

Enacting the Change X

The Role of Governance X

Enabling the Team through Technology X

In Summary XX