HCMWorks Announces Next White Paper on Indirect Procurement

HCMWorks, an emerging pioneer within Indirect Procurement consulting and advisory, has announced the topic of their second quarter White Paper.  This paper is the third release in a series on Thought Leadership in Indirect Procurement Services and will prove to be another innovative perspective on the improved practices of managing indirect expenditures.

To register for a copy, please complete the Contact Us form.  Once completed, you will be added to the paper’s distribution in April.

Supplier Management Programs:

Cost Saving Partnerships not Cost Cutting Adversaries

Procurement has played a key role in meeting their companies’ ambitious cost-cutting targets over the past several years.  Utilizing recurring negotiations with suppliers, buyers have achieved repeated discounts.  But as deals with suppliers have matured and the economy stays unstable, negotiators are finding it increasingly difficult to replicate earlier wins.  Buyers face continued pressure from their companies to continuously drive down costs, they are increasingly resorting to high-pressure tactics to squeeze more concessions out of suppliers.  At what cost to long-term, sustainable savings and continuous product/service quality?  For some companies, this zero-sum approach continues to deliver the goods (at least for now), but for many such tactics are failing.

A less adversarial approach is needed, one that views suppliers strategically, as valuable assets of the extended enterprise rather than merely cost centers.  How can procurement groups forge more productive relationships with suppliers, particularly when current cost-cutting programs are bogged down?  By analyzing suppliers strategically, buyers can determine the extent to which the supplier contributes to the company’s core competencies.  Segmenting suppliers and delegating more time and expertise to strategic relationships provides companies with an improved ability to achieve business goals.

As a company develops into a capable global competitor, it often restructures its supply base to optimize competitive advantage.  The primary focus of the restructuring effort should be on reduction of total cost, not purchase price.  In addition to reducing total cost, improvements in supply base service levels, quality, reliability, and access to technology are also achievement goals.   This paper explores the constructs of developing an effective Supplier Management program including:

• Supplier Segmentation
• Risk Management
• Metrics Management
• Expense Management
• Performance Management
• Demand Management
• Consequence Management