SOURCING AND PROCUREMENT

A sourcing or tender process is used to select the best product or service for a certain category of expenditure.

Unfortunately, lots of these processes are not run well, resulting in loss of large saving opportunities, delivery of poor quality products, or less favorable terms.

When selecting suppliers through a tender or sourcing process, the buyer works in collaboration with internal customers or budget holders. Internal customers are buyer’s colleagues working in other departments, such as finance or manufacturing. They are the ones who originally raised the need for the purchase and who will be actually transacting with the selected supplier. Internal customer involvement is usually highest (around 70%) at the specification stage and then drops to around 30% in subsequent stages.

At the negotiation stage, we analyze the offers and select the most promising suppliers to negotiate with. Only then we prepare for the negotiation.

During the meeting, our goal is to clarify the terms of the offer and get additional value beyond what has been offered, this might range from a lower price, a better quality product improved payment terms etc. At the end of this process, we conclude the deal with the best supplier.