high-definition sourcing: going beyond traditional sourcing
DESCRIPTION
High-Definition Sourcing is the preferred option when traditional sourcing just isn’t enough; it delivers for even the most complex categoriesTRANSCRIPT
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High-Definition Sourcing: Going Beyond Traditional Sourcing
4/22/2011
© BravoSolution - All rights Reserved CONFIDENTIAL
When It’s Time to Seek New Opportunities »Marketplace not responsive to leverage-based
approach»Category already sourced effectively and in control»Problem confounded with other issues
» Spend currently in house» Limited marketplace options» Traditional barriers to change
»Obvious problems with upstream decision-making»Need to change what is being bought
» Demand management» SKU rationalization» Alternate specifications
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High-Def Sourcing: When the Market’s in Control
»The Customer: Consumer Packaged Goods Company »The Situation
» ~$160 MM » Tight market conditions» Periodic one-on-one direct negotiation
»High-Definition Sourcing Approach: » Collect expressive proposals that drive consideration of historically
overlooked opportunities» Allow savings even when prices are increasing for business-as-usual» Scenario generation allows for consensus building with suppliers
»Result: » Over 25% savings
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High-Def Sourcing: When Everything’s Good
»The Customer: Global Leader in Tobacco»The Situation:
» $10 M Pilot to reduce packaging costs » Strong supply base » Order management outside of procurement responsibility
»High-Definition Sourcing Approach: » Formula-based approach to RFPs» Detailed spend analysis» Accelerate re-cost calculations under various order
policy/demand aggregation scenarios
»Result:» Uncovered an additional 25% reduction in costs
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High-Def Sourcing: When the Problem Isn’t Cost
»The Customer: Worldwide leader in pharmaceuticals »The Situation:
» Need for highly specialized service varies dramatically year to year
» Team didn’t believe sourcing could solve the problem
»High-Definition Sourcing Approach: » Integrated intangibles such as therapeutic expertise,
qualification and experience into analysis
»Result:» Good or better supply choices for less money
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