Direct materials sourcing refers to the sourcing of custom manufactured goods, and of course, raw materials from first tier suppliers that meet the particular needs of the buying organization. It is distinct from the sourcing of commodity goods and services in that the nature of the requirements are considerably more detailed than the requirements for consumables or low-value goods. If all you are buying is toner cartridges for the laser printers, cleaning suppliers for maintenance or commodity packaged goods to round out the low end of a product line, any compatible toner cartridge, cleaning detergent or aftermarket good will cut the mustard. But if the organization is buying components for a high-end laptop, looking for custom molded manifolds or building engines, the goods have to be precise. Sourcing these goods is considerably more complex than sourcing toner cartridges and detergents.
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Even though it will annoy a lot of vendors, I’m going to say it: Source-to-pay (S2P) suites may be here to stay, but top performing procurement organizations continue to select and use multiple sourcing technologies for different purposes — and they will also pay a premium for specific needs. This Spend Matters PRO brief breaks down the different categories of e-sourcing tools that companies are buying, lists specific vendors in each category, provides pricing ranges for various types of solutions and makes recommendations on how best to use different solution types — and where.
Webinar Thursday continues in October as we present Supercharging Category Management: Free Yourself from Siloed Sourcing to Unlock Breakthrough Value on Oct. 22, at 9 a.m. CDT. This is the concluding event on supercharging category management, following a wildly successful e-book and preview webinar held last month. From this webinar, you will learn case studies, technology support examples, specific industries and verticals, as well as participate in a closing Q&A. Register today!
In just two weeks, we'll present the concluding webinar from our ongoing coverage of Supercharging Category Management: Free Yourself from Siloed Sourcing to Unlock Breakthrough Value. Join us Thursday, Oct. 22, at 9 a.m. CDT, as Pierre Mitchell, chief research officer at Spend Matters, and Mickey North Rizza, vice president of strategic services at BravoSolution, present the nine different ways you can evolve from simple category sourcing to category management 2.0. Register today!
To the naked, untrained eye "e-signatures" and "digital signatures" are basically the same thing: an updated take on a historical practice in contracting for the technological age. But there are very important distinctions to make between the two. First, every digital signature is electronic, but not every electronic signature is digital. This might sound confusing, but let us explain. Download the free research brief, E-Signatures and Digital Signatures – Understanding the Difference and Learning What They Really Mean for You.
Brand new hot-off-the-press research is now available from the Spend Matters team! Jason Busch, founder and managing director, and Thomas Kase, vice president of research, present The Past and Future of Strategic Sourcing – Looking Back to Look Forward at E-Sourcing. What does the future hold for strategic sourcing? Have we reached the full value potential for this segment or are there even more savings to be had? Get the full story here!
We recently received a note from a reader with questions regarding the latest China currency devaluation and how sourcing professionals ought to engage with their Chinese suppliers. The questions included: 1) Should I be approaching all of my Chinese suppliers for a 3.5% price reduction? 2) Should I expect to get it? There are several ways to answer that question. This Spend Matters Plus article begins with the narrow answer and then expands into other aspects of China’s currency announcements.
For years, Coupa has explored the concepts of incorporating leveraged contracts into its arsenal (leveraged contracts provide pre-negotiated pricing and specified terms with select suppliers). Coupa’s own GPO program, positioned under the Coupa Advantage label, is finally real and has a number of active users and members. Earlier this week, Coupa’s GM Ashish Deshpande, who has spearheaded the effort from day 1, led a discussion with a number of Coupa customers who are already using leveraged contracts. This Spend Matters PRO analysis explores Coupa’s new leveraged contract program (including available contracts, suppliers, typical savings, business model and related topics) and strategy and explores what types of organizations should think about signing up for Coupa Advantage.
In our previous Spend Matters main site coverage of Amazon Business and Part 1 of our Spend Matters PRO analysis, we dove into some of the details of Amazon’s re-vamped foray into B2B e-commerce, particularly regarding the user experience and Amazon’s selection and pricing features. In this next edition, we’ll dive into some of the marketplace solution functionality and some opportunities to close the key gaps. In the next installment, we’ll also analyze some of key opportunities we see for Amazon to improve its B2B solution for larger firms – and even form smaller ones, too! Many associate the term “solution” only with software applications, and while Amazon Business is initially basically a re-skinned version of Amazon.com, we expect to see more e-procurement-like functionality embedded in it to serve the needs of smaller firms where a large percentage of their spending could come from a provider like Amazon. For larger firms, the story is, of course, different as we’ll explain...
In our previous post on Amazon Business (an expansion of Amazon Supply), we discussed the basics of the new release and model in its current form. But, there’s much more to this story for procurement professionals – good and bad. After spending time with members of the Amazon team, and “reading through the tea leaves” from both these conversations and other sources, there are some critical factors to consider for buyers, sellers and technology partners when they “dance with the [Seattle] bear.” Some of these are specifically commercial, and others are more strategic (IP protection, for instance). We’ll also highlight some no-brainer short-term opportunities and some more strategic opportunities and issues. For example, Amazon Business is currently an e-marketplace and not an e-commerce platform that facilitates non-intermediated commerce. Yet that doesn’t mean Amazon couldn’t become a true “platform” intermediary leveraging the technical components of the IaaS and PaaS side of the company house. Such a scenario could be closer than many might think (e.g., consider Mechanical Turk in relation to emerging contingent work platforms or think about Amazon Home Services/TaskRabbit applied to fixed-fee B2B services). Anyway, I’m foreshadowing too much. Let’s get started and dive in. In the first part of this PRO research series, we’ll focus on selection, pricing and user experience as well as highlight 10 shortfalls (or “opportunities,” if you will) in the solution stack that warrant serious consideration.
Becoming a Smarter Services Customer – The Evolution of the Operations, Procurement and Sourcing Consulting Market (Part 3) [PRO]
In Part 3 of our series examining the evolution of operations, procurement and sourcing consulting, we turn our attention to maximizing value and becoming a smarter services customer. This topic is especially critical when practice utilization (percentage of hours billed as a percent of total available hours of employee bench capacity) is near all-time highs given the current market conditions where purse strings have been slightly loosened to execute the backlog of post-recession activities (e.g., ERP upgrade projects, procurement training, "souring wave n+1" activity, etc.). Previously in this series, Chief Research Officer Pierre Mitchell and Founder and Managing Director Jason Busch explored growth rates within firms, the battle for consulting talent, the rise of new practice areas as well as threats and opportunities for the sector.
The Evolution of the Operations, Procurement and Sourcing Consulting Market (Part 2 – Threats and Opportunities) [PRO]
The management consulting market for procurement, sourcing and related services has grown dramatically in the past 5 years (in the first installment in this series, we share our market growth analysis, along with key trends in 2014). But unlike the numbers, the news (beneath the surface) is not entirely positive. Granted, while from a practice revenue and growth perspective, it is difficult to argue with anything but the notion that we are living in the “best of times,” if you're an insider in the operations, procurement and sourcing consulting market, the actual 2015 reality brings with a number of threats as well. In this multi-part Spend Matters PRO series, Jason Busch and Pierre Mitchell consider the evolution of the operations and procurement consulting market and how clients can focus on getting the maximum value from their services partners. Today, they focus on threats and opportunities in the procurement consulting market for 2015 and beyond.