Guy Allen Finds Procurement Savings in All Sorts of Places …

Last week, Guy Allen (our friend and ex CPO from Santander, Fujitsu, etc) ran the latest in the Real World Procurement webinar series, sponsored by BravoSolution, with his session titled “Finding Hidden In Year Savings”.

He set the scene – it is half way through the year and you get that call from your Finance Director or CFO.  “Sales are down on budget and margins are tight? What savings could you deliver in the current year”?

A problem, a nuisance? No, an opportunity, says Guy. “A senior person in the business has asked for your help to solve a business problem”. That must be good news for procurement - although it might contain some risks too both for procurement or more widely, if it indicates your company has cash flow problems for instance.

Guy pointed out that the CFO generally wants real money, real cash, that will help this year’s cash flow and / or P&L. But he made the interesting point that if it is your CPO or procurement director driving this programme, it is probably procurement’s own savings target that is at risk! That might need a different response to that which is appropriate to solve the CFO's problem.

He also pointed out that some of the options he presented might be disruptive, and / or difficult and that he was not making any ethical judgements on the ideas (what on earth is he going to suggest, I thought, when he said that!).

He then moved on to specific ideas, basically, there are several potential deliverables here; primarily Raising Cash, Reducing Cash Outflows, and Bringing Forward Savings. He got into some interesting ideas under each of those headings – some familiar, but some I admit I hadn’t thought of and are pretty creative – how about extending current supplier contracts in return for a premium (up-front payment)?  I guess that might take us into the “ethics” area though …

Under the “reducing cash flow outflows” heading, I liked the idea of a “stock cupboard amnesty” too! You can see that his ideas cover both tactical areas as well as more strategic ideas. I wasn’t surprised also to see eAuctions on the list, as Guy was a successful early adopter and has advocated more use of that technique for years.

He finished by pointing out the risks and implications of this sort of approach – what message does it send to the marketplace, for instance, and it might negatively affect your supplier relationships. But if needs must …

So if you are looking for ideas, you can get hold of the webinar still by registering here. And the next in the Real World Procurement series is on July 25th with David Atkinson speaking about “Supplier Relationship and Value Management: The Five Programme Killers and How to Overcome Them”. David is a top expert in this field and I’m sure it will be another excellent session - register here.

 

 

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