How to implement: From the outset, Procurement should provide the business unit with a high-level project timeline. While changes to the timeline are likely, business units should understand the team's general expectations for project duration – for example, a project lasting six weeks versus six months. This, combined with an understanding of the process and key decision points, will enable the business unit to engage in decisions on moving the project forward given time constraints. For example, a project on a tight timeframe might move from opportunity assessment into an accelerated request for quote (RFQ), as opposed to a full request for proposal (RFP). Alternatively, for projects with sufficient available time, the team could iterate through RFP development to capture a full requirement set and engage in multiple rounds of bidding and negotiations with suppliers.
5. Bring Knowledge Capital into the Business: Along with driving supplier selection, a sourcing project presents an opportunity to gather information on marketplace trends and new product offerings. By issuing exploratory questions to suppliers early in the sourcing process, the team can add previously unknown, but important, requirements into an RFP.
How to implement: As prospective suppliers are identified in the beginning stages of a sourcing event, Procurement should ask them to describe their key differentiators. At this point, suppliers are incentivized to demonstrate new products or services and to show that they are marketplace leaders in order to be allowed to bid in the sourcing event. The information gleaned from these discussions may lead to new RFP requirements, and, as the full supplier pool responds to these requirements, knowledge capital from the marketplace will be brought into the organization.
By following these best practices, Procurement can develop a true partnership with the business unit. Over time, these practices can lead to an improved perception of Procurement by the business units as they realize that Procurement can act strategically, be flexible and drive towards their goals instead of simply being an operational hurdle. Furthermore, a partnership approach promotes successful sourcing, enabling Procurement to deliver high value benefits to the organization.
About the Author: Christopher Stacy is a senior associate with Pace Harmon, an outsourcing advisory, strategic sourcing and supply chain consulting firm based in Tysons Corner, Va. More information is available at www.paceharmon.com.