Category Archives: Category Management

Procurement Lessons for Small Businesses and Large Multinational Corporations

In the world of procurement, there is a handful of strategies that can be adopted and reused across categories and clients. This can create a redundancy that slows innovation and prospects of future growth. GEP's Sanyam Khurana recently met and talked with the owner and staff of a small bakery in New Delhi and observed that there are many parallels between how this small outfit operates to what is and should be practiced at larger organizations

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Accenture Spend Trends Report: Energy Prices and Upward Cost Pressure

- August 25, 2014 6:23 AM | Categories: Category Management, Spend Management

As we continue our coverage of Accenture's Spend Trends Report, we turn our attention to the topic of energy prices and cost pressure. A number of Accenture’s findings are actually quite similar to a longer-term perspective we presented in a recent Spend Matters PRO research brief titled "Will the Cost of Energy Increase? On Statistics from the US Energy Information Administration." As Accenture notes in their analysis, energy prices are continuing on a long-term up-trend with short-term pullback and volatility along the way, albeit with a underlying long-term inflationary undertone.

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Where Lower-End Sourcing Tools Strike Out Quickly (Part 2)

- August 13, 2014 6:21 AM | Categories: Category Management, Sourcing, Spend Management

Basic sourcing tools, especially those integrated with broader source-to-pay suites or the stand-alone capability of ERP providers (and those ERP providers have acquired), tend to come up short with specialist providers in a range of areas on a functional basis. But from a pragmatic perspective focused on business requirements, there are a number of areas where lower-end tools tend to strike out fairly quickly. These include the ability to support centralized procurement efforts – including those organizations with centers of excellence (CoEs) – along with decentralized execution mapped to centralized requirements and processes.

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Managing Complexity – A Reevaluation of Energy Procurement Strategy

There are few areas of corporate spend that invites as much fierce debate in strategy as the area of energy. The sheer number of purchasing mechanisms and strategies available can be overwhelming, and the advice of consultancies and subject matter experts is often contradictory. The combination of electricity, natural gas, and fuel oil is frequently one of the top five areas of indirect spend, and some organizations with energy-intensive manufacturing processes build energy expenditures into standard costs. Such a critical and complex category requires a clearly defined management strategy that is flexible enough to evolve with changing internal and external conditions.

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Spring Cleaning Time in the Procurement Household: A Checklist

Spring cleaning is just as appropriate for most procurement organizations as it is for each household. Here then, is a checklist of procurement’s spring-cleaning chores, with potential to yield far more than just a little loose change in the sofa and better visibility than Windex applied to windows obscured by streaks and grime. Zycus's Richard Waugh covers contracts, spend analysis, supplier management, and more in this guest post for Spend Matters.

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SKU/Supplier Rationalization and Demand Management: Four Key Tips Not to Forget

When it comes to thinking through the best means of rationalization SKUs and suppliers for both basic and complex categories – and not having a centralized procurement function fall flat on its face when it comes to having the business successfully implement a program following a sourcing exercise – there are many lessons learned from those procurement organizations that have embarked on such programs before. My colleague Peter Smith encapsulates four of the most important tips that companies should not forget. Read on for what these are.

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Improving Cost and Efficiency of Plant Operations

Capital equipment purchase is usually driven by business requirements and a stringent schedule, which makes it challenging to develop sourcing strategy while most of the MRO spend is to keep the plants operational. However, if procurement and supply chain take a step back and look at it holistically, they can identify some long-term solutions to these issues. Here are some tips to prioritize your approach.

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SKU/Supplier Standardization in Procurement: Simple Best Practices

The more complex a category (e.g., specialized services such as legal or marketing spend), the more likely an inexperienced procurement organization is to specify a supplier, SKU, or particular service that is likely to prove unpopular with stakeholders. But what best practices can centralized procurement and category management teams deploy for both basic and complex spend areas to avoid the “failure to implement savings” trap. My colleague Peter Smith has some ideas. Read on!

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Why SKU/Supplier Standardization is More Difficult Than It Looks: Choosing the Wrong Products

Another related risk of standardization my colleague Peter Smith discusses is that after going through a rationalization exercise, the selected product ends up not meeting the needs. In this area, Peter explains that we observe "over-optimistic approaches to standardization … which results in a standard product or service being purchased that does not actually meet the needs of the users, whether they are internal stakeholders or ultimate consumers." Read on for further insights from Peter's paper.

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Concur and Procurement: Looking to the Future and Innovation Today

- May 19, 2014 2:15 AM | Categories: Category Management, Invoicing, Travel

Within procurement, many know Concur as a T&E provider, and Concur’s strength in this area no doubt continues. But the company has more to offer procurement than just a T&E reporting tool (albeit an extremely slick one). In this Spend Matters PRO research brief, analyst Thomas Kase will look at some other tools from Concur, show you some screenshots of what their capabilities actually look like, and speculate on where they might be going with their offering. Not a Spend Matters PRO subscriber yet? Contact us to inquire about a 30-day free trial.

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Why SKU/Supplier Standardization Matters for Basic and Complex Procurement Categories

- May 15, 2014 6:29 AM | Categories: Category Management, Learning / Research

When it comes to demand management, one of the first steps that many procurement organizations take in driving to indirect category strategy (office products, MRO, etc.) is attempting to reduce the number of similar SKUs that the organization purchases. There are many reasons for this and such strategies are not just about driving unit cost savings (e.g., SKU rationalization can take into account green/CSR strategies, supplier diversity, supply risk management, balance of trade and many other factors). But at its core, standardization is certainly about leverage, if not savings directly.

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Exploring the Evolution of IT and Strategic Sourcing (Part 1)

When I first read about strategic sourcing in Forrester, IDC, and Gartner reports back in 1999, I thought the analysts had no clue what procurement was. But then I realized that they were specifically referring to another IT-centric definition of strategic sourcing, rather than one focused on broader procurement, finance, and supply chain. I came across a more recent article in Data Center Dynamics.

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