What Can Subway Teach us About Procurement?

Spend Matters welcomes this guest post from Nitin Khandelwal, of GEP.

I am a big foodie and when I am out on weekends, I just cannot resist the temptation to eat junk food. Subway sandwiches are supposedly one of the healthier fast food options available, and I am quite fascinated by the company’s approach to getting its customers involved in customizing sandwiches. Right from choosing the bread, the patty, veggies and finally the sauce, a customer requests his preferences and helps the sub guys serve him better.

As a procurement professional, I can’t help but think how fantastic it would be if our business stakeholders would involve us right from the start of every project, just like Subway gets its customers involved right from the beginning. Unfortunately, procurement support is often requested when the specifications have already been finalized, the supplier list has been agreed and the business strategy of the category has been decided.

Let’s analyze the areas in which procurement support can be invaluable:

  • Opportunity Assessment (Identifying the Bread): Identifying the right opportunities at the right time can kick off the right initiative just like choosing the right bread forms the base for the perfect sandwich. Conducting regular spend analysis can highlight current gaps and future opportunities.
  • Category Strategy (Choosing the Protein): This is the most important ingredient of the sandwich and will define the ultimate taste and cost of the sandwich. Similarly, as category owners, procurement can work with the business to define the long and short term objectives of a particular category for the upcoming business requirements. At this stage, you can select whether you want cheese in your sandwich and have it toasted; similarly, strategies can be defined to identify the correct supplier mix, to ensure constant supply of products and services and to manage risk.
  • Supplier Mix (Mixing the Right Veggies): There may be a lot of suppliers in the market who can provide the requisite products and services; but procurement can shortlist the mix of suppliers to whom the business should reach out. Those shortlisted suppliers should be the right fit to the business commercially, culturally, and in terms of service levels and strong financials — otherwise the taste of this long term relationship will soon turn sour.
  • Procurement Software (Using the Right Sauce): Just as the right sauce provides much needed flavor and perfects the sandwich, the right procurement software can support the sourcing exercise in a truly efficient way and make the lives of all those involved a lot easier — especially in terms of coordinating with hundreds of suppliers, collating their bids, the subsequent analysis and above all, the fair and transparent exercise.

Using these ingredients and involving procurement at the right time in a project can help any business dish out the best and the healthiest sandwich ever.

For more tasty thinking on procurement, visit the GEP Knowledge Bank.

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Voices (2)

  1. Paul Weeks:

    I recon they need to start selling the falafel we make. It seems the veggies and meat reducers could do with a falafel option. I hope Subway’s procurement company will reply to my enquiry.

  2. RJ:

    Nice try but unfortunately this analogy falls down if, as in my personal view of Subway’s sandwiches, the pre-selected shortlist of options in all of the above categories are all tasteless or poor quality!

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