Today we turn to a post from Tom Finn over on Healthcare Matters:
Late last year, I interviewed Jeff Ryan of BravoSolution, a veteran of our industry and a genuine expert in the application of optimization to sourcing. Briefly, Jeff made a point in our discussion (I'm paraphrasing) that "there was no room for reverse auctions in a collaborative approach to sourcing." And while I agree with him, it's important to note that Jeff wasn't saying that reverse auctions are bad or have outlived their usefulness. The point is that they do have their place; just not in supplier markets where your ability to realize full value potential requires a partnership. But it's even more than that.
When you're thinking about what sourcing tools to use, consider your choice in the context of the negotiation brand you want to develop – and promote. Obviously, you want to focus your "collaborative energy" in areas where you know the scope of the value creation opportunity is worth your effort, but the sourcing tools you use and the approach you take are only a part of your "personality." SCM professionals need to build a brand with their suppliers –a brand that accurately reflects a negotiation reputation. Because that brand quickly becomes a defining part of market presence – and your ultimate leverage.