Key Strategies for Wrangling your Indirect Spend

Even companies with the most cost-effective, efficient operations can struggle with indirect spend.  Often not centralized and left in the hands of a variety of players in disparate locations, it’s all over the place.  

So, this post is dedicated to sharing some key strategies for wrangling your indirect spend to get it working for your operation and not against it.

The challenge of managing indirect spend

The wide array of categories in play makes indirect spend a challenge to manage effectively.  Managing the diverse supply chain involved can be daunting.

But spend per category tends to be lower with indirect spend.  When companies aren’t buying in volume, they don’t have the leverage they need to get the best pricing from suppliers.  But while that’s true, companies tend to order more frequently, across multiple categories. When this function is based on manual processes, it represents a profound drain on resources.

And when indirect spend is spread out across multiple locations or departments, things can get out of control quickly, due to cowboy spending.  An immediate need may compel employees to purchase for reimbursement, taking the purchases they’re making “off road”.

It’s the nature of the indirect spend that marginalizes it.  While principals are clear on the value of direct spend, the enormity of indirect spend is rarely scrutinized to arrive at strategies to make it a Center of Excellence.  Without control of the supply chain or the quality of goods being purchased, indirect spend is not as transparent in most operations as it should be.

The strategies

Without the executive tier’s buy-in, it’s unlikely you’ll be able to reform your indirect spend.  So, getting that first is the foundation of wrangling it.

Data is your friend, as you point out the largest areas of indirect spend to executives.  Analyzing that data and finding ways to rein in costs by knowing about the areas you’re presenting to them as targets for potential reform, demonstrates the need for change.  When you’re able to clearly show that you can do better, they’ll be on board

The largest areas of your indirect spend are where preferred suppliers should be established.  This change will rein in cowboy spending.  By consolidating suppliers in the bigger ticket categories, you get the leverage you need to cut costs, improve the supply chain and ensure quality.

Reduce manual input and create a sharper focus by using collaboration tools that manage indirect spend for you.  Data tells you what you need to know and automation cuts out manual processes.

While the numbers and types of vendors are many in indirect spend, there are four key KPIs which can make a difference.  These are compliance, competitiveness, continuous improvement and customer satisfaction.  Applying these as a test of your indirect spend’s effectiveness creates a framework for reform.

Wrangle it, with CenterPoint Group

Indirect spend is a challenge for many companies, but with CenterPoint Group GPO it’s met with focused expertise from a trusted procurement advisor, leveraging $850 million in collective indirect spend.

Contact us.  Let’s wrangle.

The post Key Strategies for Wrangling your Indirect Spend appeared first on Centerpoint.

source http://centerpointgroup.com/key-strategies-for-wrangling-your-indirect-spend/

Dealing with Outsourcing Supplier Instability

There’s no question that a certain amount of risk is to be expected when discussing suppliers.  Instability happens. But there’s no reason you can’t manage the potential for supplier instability effectively.  

While you may not be able to eliminate all the risk inherent with respect to suppliers, you’ll certainly be able to mitigate it by approaching it mindfully and with a strong plan to insulate yourself at least partially.

Let’s discuss dealing with outsourcing supplier instability and how to reduce the risk this really represents.

Doing the due diligence

Outsourcing agreements demand due diligence.  You need to have the highest level of confidence in the supplier you’re dealing with and to know that they’re as stable as possible.

Take the extra step of establishing the financial status of the supplier.  If they’re a subsidiary of a publicly-traded parent company, that information should be forthcoming.  You shouldn’t need to source information from the internet. In fact, a failure to provide you with that information when you ask for it is an obvious red flag.

In the case of a subsidiary, it’s not excessive to request a guarantee from the parent company as a schedule to your contract.

But establishing the stability of a supplier isn’t a one-time deal.  It’s an ongoing effort to ensure the integrity of the supply chain. This practice supports seeing potential problems before they become big uglies.

This is another part of your contractual agreement.  Putting it in writing establishes the fact that you intend to continue due diligence with respect to stability moving forward – something suppliers should readily comply with.

Other contractual concerns

We’ve discussed due diligence above and the imperative to include mechanisms to allow this in your contract.  But for due diligence to be effective, the remedies available and the rights of the customer when issues arise should be clearly stated.

When due diligence unearths a potential problem, your contract should include triggers for the right of termination, transition assistance (ideally with no extra financial obligation on your part), access to and training in the source code for the supplier and removal of restrictive covenants.

Prepare to negotiate for these and any other contractual protections.  Most suppliers want to limit triggers to bankruptcy, force majeure (natural disasters, for example) and other huge impediments like injunctions related to intellectual property.

Your purpose is to enshrine in your agreement the ability to act on what your ongoing due diligence reveals about potential risks, so be tough and get what you need to protect your company against potential instability.

Termination triggers should also be clearly stated and broadly defined.  While suppliers will litigate against these, you’ll be protected against events like sudden bankruptcy or supplier intransigence, like threatening to cease carrying on business.

Your company’s legal department is the key to dealing with outsourcing supplier instability.  Clear contractual definitions which protect you from the outfall of supplier instability are your best defense.

CenterPoint Group

CenterPoint is a trusted procurement advisor.  Let us revolutionize your procurement processes and strengthen your supply chain with the power of numbers.  Contact us.

The post Dealing with Outsourcing Supplier Instability appeared first on Centerpoint.

source http://centerpointgroup.com/dealing-with-outsourcing-supplier-instability/

Procurement Consulting: Tips for Getting the Most Out of Your Experience

If you’ve retained or are thinking about retaining the services of a procurement consultant, then you’re probably aware that your purchasing practices need a steadier hand.

And that’s exactly what procurement consulting can do for you.  Especially in the complex world of indirect spend, a procurement consultant can provide the insights, leverage and supply chain stability your company needs to get the most out of purchasing.

Let’s look at procurement consulting:  tips for getting the most out of your experience and get you ready to exploit your new relationship to optimal benefit.

Exchange knowledge

You know your strength and weaknesses.  That’s important information for a procurement consultant.  But you need reciprocation for the relationship to work.

What you’ll discover as you’re getting to know your consultant is that expertise you need is coming through the door.  But what your new team needs from you is total transparency – and your existing team needs that too. Everyone needs to be on the same page to derive everything you can from this relationship.

A procurement consultant worth its salt is going to work with the knowledge you share and provide solutions and focused expertise that get your purchasing solutions working for your company.

Share strategy

Hiring a procurement consultant doesn’t mean the process is completely out of your hands.  It’s a collaborative effort which involves devoting yourself to sharing strategy and the processes in place.  This gives your consultant a connection to what you do and to the people who do it for you – your employees.

Talking about your supply chain is important.  This provides your consultant with important insight and clarity, creating a window into what’s going right and what’s going wrong.

Communicate openly

Is there any obscure corner of life which wouldn’t benefit from a little clear, open communication?  No. Working with a procurement consultant is no different. Some people in your organization are going to be nervous about handing this function off to an outside influence.  But clear communication will serve to dispel any doubts. It will also get you the best results. How is a consultant of any kind to deliver the kind of benefit they’re capable of without keeping the lines of communication open and clear?

It’s that kind of forthright communication that can build a mutually beneficial relationship.

Be open-minded

All mutually beneficial relationships are built on trust.  Your procurement consultant is there to pull all the strands of your purchasing operation into a nice, tight bunch, bringing you fresh approaches and new ideas.  You may even find they bring you plum clients and reliable vendors.

Your consultant can also connect you to technology that takes human error out of the equation, opening the door to automation and data analysis that lets you see the big picture.

But you need to keep an open mind to let your consultant get all that done.

CenterPoint Group

CenterPoint is a Group Purchasing Organization that brings your company the power of numbers.  Contact us to revolutionize your procurement process.

The post Procurement Consulting: Tips for Getting the Most Out of Your Experience appeared first on Centerpoint.

source http://centerpointgroup.com/procurement-consulting-tips-for-getting-the-most-out-of-your-experience/

Non-Manufacturing Industries are Growing – and So Are Their Orders

In a November analysis, Anthony Nieves (Chair of the Institute for Supply Management) wrote that Non-Manufacturing Industries had grown for 106 consecutive months, as of writing.

That’s almost 9 years.

And that growth is reasonably consistent across the industries represented in the sector, from Scientific and Technical Services to Education, to Healthcare.  And in terms of orders for indirect spend items, they’re keeping up with growth and/or increased market presence by consuming more of them. The Non-Manufacturing New Orders Index is now at a steep 62.5%.

And with that need, come challenges with respect to budget realities and increasing prices for indirect spend office supply necessities like paper.  Hit hard by tariffs and the one-two punch of pulp mill price increases and a resulting spike in the cost of paper, the entire line item is spiraling out of control for some companies.

But with CenterPoint Group, you get the power of numbers and personalized service that ensures you’re getting the best deal possible.  We’re a Group Purchasing Organization that leverages over $850 million in collective indirect spend for our members. That brings them price stability, the heft of a collective spend individual entities don’t have and the security of a stable, highly-functional supply chain.

Non-Manufacturing Industries are growing – and so are their orders.  But why should they be at the mercy of unforeseen price increases and realities like costly tariffs?

Now’s the moment

Nieves’ analysis of the Non-Manufacturing sector also revealed that deliveries were slower in the month of November. While at least some that effect has to do with the time of year, this was Supplier Deliveries’ 35th consecutive month of slowdowns – almost 3 years of product delivery slowdowns.

Supply chain blips can cost you money unnecessarily.  CenterPoint Group members know that we partner with suppliers to ensure our next day delivery.  There’s never any question you’ll have what you need when you need it.

But that’s just another key facet of what CenterPoint does for its members.  We’re a “hands-on” procurement advisor managing your indirect spend to ensure you’re protected against precipitous price increases.

With CenterPoint, you’re not alone.  Sudden price increases are distributed across a larger infrastructure with more abundant, pooled resources.  And across each spend, even more, the impact is absorbed. That’s the power of numbers, brought to you by GPO procurement.

With 18 Non-Manufacturing Industry spaces reporting increased prices as of Nieves’ November 2018 analysis, people are feeling the pinch.  With pulp and paper prices projected to grow and tariffs stubbornly entrenched for the moment, now’s the moment for Non-Manufacturing Industry players to claim the power of numbers.  For leverage that’s got you covered, contact us.

The post Non-Manufacturing Industries are Growing – and So Are Their Orders appeared first on Centerpoint.

source http://centerpointgroup.com/non-manufacturing-industries-are-growing-and-so-are-their-orders/

Price Increases in Office Supplies in 2019

In case you hadn’t noticed, the price of office supplies (paper in particular) is steadily rising.  Part of that trend is the impact of the recent US tariffs. This reality was readily seen in an almost 15% price increase for copy paper.  

And part of the reason for price spikes for paper products is the steadily rising cost of pulp.  Mills have been inflating their pricing since February 2017. Thus far, a precipitous rise of 25% has been seen and that’s expected to continue into 2019.

Paper mills don’t just absorb that additional material cost – they pass it on to business consumers like you.  This year alone, there have been 4 distinct price increases and like pulp, like paper – someone’s going to pay for the pulp industry’s burgeoning pricing model.  After 20 years in the commercial wilderness as the rise of the internet radically reduced paper production needs, the pulp industry is in funds recovery mode.

Someone’s got to pay for that recovery, but must it be you?

Price increases in office supplies in 2019 demand creative solutions that get your company the leverage it needs to hold the line on market fluctuations and the application of tariffs.

The GPO solution, with CenterPoint Group

Managing an indirect collective spend of over $850 million, CenterPoint partners with members to routinely deliver below market pricing.  This is a creative way to mitigate unforeseen price increases that bust your budget.

Our organizational relationships with Office Supply companies as well as other key categories are strong, allowing us to manage the vendor on behalf of members.  MRO, Industrial and Facility Supplies and Safety & PPE are other pivotal connections we engage to service our members with a better deal and a stronger supply chain.

We’re a Group Purchasing Organization (GPO) and trusted procurement advisor, investing our members with the power of numbers.   That power not only reduces their overall spend, it protects them from sudden price increases like those currently being experienced with respect to office supplies, especially paper products.

Just the facts

With CenterPoint at work, you don’t have to track price fluctuations.  We closely monitor the paper market on behalf of our members, ensuring that increases are foreseen and that pricing is maintained.  For 4 years running, we’ve been able to do just that for our members.

But recent increases have challenged us.  CenterPoint met that challenge for our members, in a market in which end-user costs increased dramatically, at 15%.  Our members were able to weather the storm with a much less staggering increase, at only 4%. When absorbed into a total spend, that amount is reduced even further, to just 1%.  

That’s below the Consumer Price Index.

Optimization

Optimizing your spend with the power of numbers, CenterPoint Group is able to deliver significant savings and budgetary stability.  That power also provides you with ballast to whether the market’s whims and the costly impact of tariffs.

CenterPoint Group brings you the power of numbers, preparing you for the unexpected.  Contact us.

The post Price Increases in Office Supplies in 2019 appeared first on Centerpoint.

source http://centerpointgroup.com/price-increases-in-office-supplies-in-2019/

How to Save Millions in Indirect Spend

Managing your indirect spend can be challenging.  Accounting for between 15 and 20% of total spending for most companies, it’s a complex feat, indeed, taking in numerous categories of goods and services and a battalion of suppliers.  But you should know there are companies out there who are spending as much as 50% of total spending on indirect spend.

So, it’s important and it can get away from you in a hurry.

There are so many factors affecting the bottom line in this area of procurement, from rogue spending to a preponderance of inoperable or unused inventory.  But you can save millions in indirect spend if you play your cards (and your data) right.

Rogue spend effectively is a huge undertaking and one which your organization may not currently have the human resources required by such an effort.  Even if you have the resources, do they offer have the kind of experience you need for managing indirect spend?

Let’s get into some of the areas you can achieve superlative savings and efficiencies by getting your indirect spend under control and pulling its weight.

First steps

Reining in your indirect spend is all about the strategy you apply.  But to begin with, just shifting your focus to rogue spend costs can save you 25% right away.  And that’s only a first step.

An important key to optimizing your procurement process is automation in key areas like supplier payments, reorders and another administrative tasks.  This free hands for more important work. Also, when your payments are automated, you’re going to save on late fees.

Automation also provides you with excellent data which can be applied to refining your budget.

Transparency

Knowledge is power and the more you know about your indirect spend, the more power you have to streamline it.

Transparency means that the people up the chain know how funds are being spent and who’s spending them.  Who has access to the corporate credit card? When you don’t have that information, there’s no accountability because that could be more than one employee.

Making transparency a priority helps to eliminate rogue and fragmented spending, giving everyone a bird’s eye view of where the money’s going.

Find the big spenders

For this one, you’ll need well curated data which points you at decision makers or departments who are spending the most on indirect spend.

Here’s where incredible savings can be had.  Working with your big spenders to reduce their footprint wherever possible can change the whole game.

While you may not be able to cut costs on all indirect purchasing, finding the big spenders will inform you as to how money is being disbursed, which is an invitation to save.

Get there with CenterPoint Group

CenterPoint is a Group Purchasing Organization (GPO) and trusted procurement advisor, leveraging the power of an indirect collective spend of over $850 million.  Economies of scales aren’t the only thing that saves our members money, though.

At CenterPoint, we make managing indirect spend a seamless process that doesn’t strain your human resources (or even hurt a bit).

Contact us.

The post How to Save Millions in Indirect Spend appeared first on Centerpoint.

source http://centerpointgroup.com/how-to-save-millions-in-indirect-spend/

Finding the True Total Cost of Ownership (TCO) Within the MRO Category

Every product or system costs money.  But it’s about more than the product or system itself.  The Total Cost of Ownership (TCO) must consider a variety of factors, including the indirect costs associated with the product or system, including big ticket items like labor.

Finding the true Total Cost of Ownership (TCO) within the Maintenance, Repair and Operations (MRO) category begins at the very start of any purchasing process to help procurement discern the most cost-effective way forward in a competitive environment.

Maintenance, Repair and Operations (MRO)

Getting MRO indirect spend in line can be a very involved undertaking.  MRO is a complex category with many moving parts. It takes in everything on the manufacturing floor, including cleaning supplies.  The variety of goods found under this category is dizzying, making it an area of indirect spend which can be difficult to rein in.

But there’s more to tracking TCO in the MRO category than parts and products.  It’s also about understanding when items in the category are needed. While stopping production may be required to replace machinery and parts, that’s a costly endeavor and one which will disrupt the supply chain and delay delivery times.

A plethora of suppliers needed for a wide variety of items and the opacity around spending at the SKU level can make effective supplier management and strategic sourcing tough.

Adding even more complexity is the relationship between procurement and people on the shop floor.  There’s a disconnect which too often occurs as silos arise. There’s a need for flexibility in the questions of sourcing in this regard but the process needs to be uniformly managed, at the same time.

And then there’s the problem of any given operation’s various facilities communicating.  Different facilities source different suppliers for the same goods and services, creating an unruly beast of a supply chain.

Economies of scale which might create better opportunities for procurement are sidelined in siloed environments and that costs money.

Enter the beast wrangler

Discerning TCO in the MRO space is no mean feat, so calling on the services of a GPO with focused experience in wrangling the beast is the way forward.

Your supply chain needs must be understood in a process-driven way.  Getting a handle on your goals and figuring out where pain points in the process exist is how CenterPoint Group starts taming your MRO supply chain beast.

Data drives our solutions, but so does observation of processes on the shop floor and how staff there is interacting and collaborating with procurement.

Organizations like yours need a Group Purchasing Organization like ours.  We bring the resources, analytics and experience you need to tame that beast and get it working for you and reducing your TCO in the MRO category.

Working with the procurement professionals at CenterPoint, you’ll join a membership which has the power of numbers behind it and $850 million of indirect collective spend supporting it.  But cost savings are just the beginning of what we can do.

We bring the collar and leash for your MRO beast.

The post Finding the True Total Cost of Ownership (TCO) Within the MRO Category appeared first on Centerpoint.

source http://centerpointgroup.com/finding-the-true-total-cost-of-ownership-tco-within-the-mro-category/

Managing Procurement’s Brand Within the Business

Branding is an exercise in putting a coherent face on a product, service or corporate entity.  It makes the nature of the business being done and the philosophy behind it visible and transparent.

And for procurement, branding can be challenging.  Procurement’s role is rapidly shifting, becoming integrated with the business goals of the entities they serve as an integral part of how they serve them.  So, managing the procurement’s brand within the business demands that the shifting face of the sector serve the project of an effective branding initiative.

Where’s the emotional connection?

An effective brand connects with its market emotionally.  On a visceral level, the brand adheres to consumer consciousness, compelling loyalty.

So, where’s the emotional connection for procurement’s brand?  That’s largely determined by perception. And if procurement is perceived as a cost-cutting sheriff, counting the post-it notes and pens, then the perception is creating a notably negative emotional setting.

With procurement’s rising prominence as a driver of profitability, innovation and fidelity to ethical corporate missions through the supply chain, comes a re-branding opportunity.

A shift in perception may only be affected by the observer, ultimately.  But what procurement professionals need to do to shift that perception is to re-brand procurement’s true value.

That’s achievable through individual and collective engagement, meeting and exceeding expectations, extending innovative and meaningful transformation through data and technology and aligning itself with corporate goals.

Overall these perception-shifting actions is the umbrella of corporate culture.  Re-defining the mission of procurement in the light of his guiding framework is the key to the emotional connection a good brand establishes with its market.

A trusted advisor to leadership

While cutting costs is an impressive feat, leadership wants more from procurement now.  And procurement is positioning itself to take on the mantle of trusted advisor. And therein lies the brand.

Procurement leaders are now seated at the right hand of senior leadership, advising on corporate planning and budgeting.  In this space, they’re empowered to explore and innovate toward less costly and higher quality alternatives, often implicating key suppliers in the realm of development.

Innovation and insight

In working closely with suppliers, procurement professionals can drive the innovation lifecycle, supporting suppliers to not only serve buyers but to collaborate with them toward new horizons.

By collecting and collating supplier data, procurement leaders are creating new insights into markets via predictive analytics.  In this area, particularly, there is tremendous opportunity to change the game.

Managing supply chain risk

Supplier instability represents a rupture in the chain.  It can arrive suddenly, occasioned by worker unavailability, civic unrest or economic realities.  But with close working relationships with suppliers in place, procurement leaders are uniquely placed to manage the risk supplier instability represents.

All these qualities line up to create an entirely new perception of the procurement function and its role in business.  

Effective procurement professionals bring these qualities to the table, as trusted procurement advisors – a branded emblem of 21st Century procurement.

Procurement professionals are re-branding the sector to create new opportunities.  CenterPoint Group is leading the way. Contact us.

The post Managing Procurement’s Brand Within the Business appeared first on Centerpoint.

source https://centerpointgroup.com/managing-procurements-brand-within-the-business/

Stakeholder Engagement: Unlocking a Procurement Consultant’s Value

Engagement is a popular theme these days.  Everywhere you look people are talking about it in terms of employees, consumers – you name it.  But this post specifically addresses stakeholder engagement: unlocking a procurement consultant’s value.

And that’s precisely what engaging with internal client stakeholders does.  It allows procurement consultants to get up close and personal with the people deriving value from the relationship.  It takes that relationship between provider and client to the next level – deeper – bringing relatability and trust to the procurement function.

Let’s talk about what a “high-touch” client experience means to procurement consultants and how it adds value to the service we offer our clients.

Meeting specific need

The first step toward creating a lasting relationship is understanding what the other party needs.  That means drilling down. Breaching the boundary between the client (company) and its internal stakeholders means garnering knowledge about the requirements of their individual mandates.

That understanding leads procurement consultants straight to the heart of the matter – the drivers which are responsible for creating value intra-departmentally.

What looks good to one stakeholder may look quite different to another, so getting a handle on objectives held by internal people allows procurement consultants to answer specific demands for value which directly impact those objectives.

Out of invisibility

It’s too often the case that procurement is viewed form the standpoint of being solely a cost-cutting enterprise.  While it’s true that the right procurement consultant is going to save you money, it’s also true that smart procurement adds value in many other ways.

And procurement has been addressing the perception problem by shifting the focus from the bottom line to the KPI (key performance indicator) effect it can have on business.

The ongoing shift to greater sustainability and transparency in the supply chain is answering the need for companies to live up to their mission and values statements.  By working with suppliers to ensure these qualities are top-of-mind, procurement consultants add value, bringing them out of the cost-savings-focused shadows.

Risk management is part of that, as well as encouraging innovation from suppliers to better live up to the client’s stated commitment to a sustainable supply chain.

Acting as a liaison between client and suppliers, procurement consultants bring something new to the party.  It’s no longer all about the cost savings. It’s about companies being who they say they are and ensuring that all parties in the supply chain are on board and honoring a commitment which has been publicly stated.

Building rapport

Creating communicative opportunities allows procurement consultants to learn what is most important to internal stakeholders in a variety of business units, from finance to risk management.  This allows them to offer the value-added solutions that deliver a greater ROI beyond basic cost savings.

By participating in the business objectives of clients, procurement consultants align their work with that of senior stakeholders, adding value by sharing key goals.

Relationships matter.  When they’re intentionally constructed, procurement consultants become partners in the achievements their clients have top of mind.

CenterPoint Group is a trusted procurement advisor.  Contact us.

The post Stakeholder Engagement: Unlocking a Procurement Consultant’s Value appeared first on Centerpoint.

source https://centerpointgroup.com/stakeholder-engagement-unlocking-a-procurement-consultants-value/

Do You Know the Difference Between Strategic Sourcing and Category Management?

Opportunity abounds in the brave new world of procurement.  Category Management is part of that. Rapidly evolving to the status of a sector game-changer, Category Management is setting the foundation for the ability of procurement leaders to strategically align with business objectives.

As procurement transforms into a service that offers value well beyond cost-cutting initiatives, Category Management is emerging as a locus of sourcing strategies which serve the greater corporate good.  And that’s great news for procurement and for the businesses it works with and for.

Big differences

There’s more than one difference between strategic sourcing and category management. But the differences are about the fundamental nature of the two styles in play.

For example, strategic sourcing fulfills a function.  It is a cup of coffee from a vending machine compared to an espresso.  Category Management is primarily strategic, taking sourcing of goods and services from a solely cost-based fulfilment model to one which serves a greater purpose in organizations.

Supplier relationships is one key area in which category management departs from strategic sourcing decisively.  Traditional sourcing sets up an adversarial relationship between buyers and suppliers – locked in combat.

Category Management demands collaborative effort to reach a common goal – better delivery results in a better profile, as does higher quality achieved through mutually-pursued innovation.

Executive support for procurement goes beyond passively viewing bottom line results.  It deploys a proactive executive tier engaged with procurement for strategic effect.

Consultative collaboration

In a recent post, we’ve discussed the branding of procurement considering its ongoing transformation to a C-level function.  Consultative collaboration is a huge component of that transformation and the secret to transitioning a Strategic Sourcing model to a Category Management one.

For that to happen, procurement must be perceived (branded) as a strategic partner.  By developing new products and markets, procurement’s role becomes one of magnified value, down to the customer engagement level.

The consultative role of procurement resides in its understanding of processes and how they can be reformed to represent a profound sea change.  By bringing knowledge to the table which is otherwise obscure and applying it to problems like supply chain transparency and managing risk through that chain, procurement gets that coveted seat at the table.

Category Management is an opportunity for business and procurement is the door behind which it waits to be unleashed.

Value-creating sourcing

Category Management represents an evolution to the next level of maturity for Strategic Sourcing.  By fostering collaborative relationships with suppliers, the nature of sourcing is fundamentally changed, creating value-driven communities of procurement.

The systematic and disciplined approach to sourcing expressed by Category Management creates key relationships with suppliers.  When your suppliers provide the bulk of similar products and services within a given category you create opportunities for tremendous discounts.  

Building relationships intentionally is the basis for successful Category Management.  With time and realized objectives like delivery, value and innovation, the fruit borne by this style of sourcing is material.

CenterPoint Group is a trusted procurement advisor, bringing our clients focused, analytical account management.

The post Do You Know the Difference Between Strategic Sourcing and Category Management? appeared first on Centerpoint.

source https://centerpointgroup.com/do-you-know-the-difference-between-strategic-sourcing-and-category-management/

Building Win-Win Buyer/Supplier Relationships

Relationships can be complicated. As in personal relationships so is in procurement.  When things go sideways, someone always ends up on with the short end of the stick.

But it doesn’t need to be that way.

Building win-win buyer/supplier relationships is not a trick with mirrors.  It’s about applying the same respect and reciprocal impulse to the supply chain that exists in any healthy relationship, romantic or otherwise.

And that’s not exactly easy.  We’re not going to kid you. It’s a project.  But it’s a project with benefits which only become more apparent as the relationship gracefully ages into mutually beneficial satisfaction.

The four attributes

A study conducted by researchers at the Rutgers Business School examined buyer/supplier relationships in the US car industry over a 20-year period.  

Focusing on the suppliers’ perspective, researchers examined data from instances in which buyers were engaged in product development with suppliers – instances which present the greatest potential for conflict.  

Arising from that data were four interconnected attributes which define the subject of our post – win-win buyer/supplier relationships.  And again, they’re precisely what’s required to establish any healthy relationship.

Communication

When humans gained the powers of speech, we also gained the ability to collaborate effectively.  Communication is at the heart of any human interaction. But it can fall apart if people aren’t clear that they’re working toward a common goal.

Openness and clarity were deemed by suppliers in the Rutgers study to reinforce more effective relationships, especially where innovative collaboration is concerned.

Sharing plans with suppliers for innovative collaboration, even when they’re not involved, increases confidence in the relationship.  And communication fosters a sense of collegiality and (dare we say it) friendship.

Commitment

Many will tell you that a romantic relationship without a commitment is a flirtation.  Are you flirting with suppliers? Or are you in it for the long haul?

When you make a commitment, you inspire trust.  You’re a known quantity that’s taking the relationship seriously.  Where there’s trust, there’s a foundation for mutually-realized benefit for years to come.

Trust

Why would a supplier contribute ideas to product development in an environment which didn’t feel stable?  

Establishing trust brings out the riches of supplier knowledge that creates dynamic collaborations, reaping tremendous rewards.  Being trustworthy in the eyes of your partner establishes integrity and reliability. On that, a strong and fruitful bond may be built.

Equality

Buying things doesn’t imply the superiority of the buyer over the seller.  When that impression is conveyed, you’ve chosen your interests over those of your partner and over the enduring value of equality.

Power in relationships waxes and wanes but an intentionally stable power dynamic is rooted in mutually-acknowledged equality.

Establishing mutual dependency based on shared goals creates a functional understanding of the value of a relationship in total balance.

We know that relationships are tough. But win-win buyer/supplier relationships are well worth nurturing.  With the right deployment of the four Rutgers-identified attributes we’ve discussed in this post, you’ll enjoy flourishing, creative, collaborative relationships that stand the test of time.

And is there anything more serendipitous than happy relationships?  Contact us.

The post Building Win-Win Buyer/Supplier Relationships appeared first on Centerpoint.

source https://centerpointgroup.com/building-win-win-buyer-supplier-relationships/

New Challenges for Procurement Leaders

Gone are the days when procurement was all about dollars and cents.  Contemporary procurement leaders are onboarding more strategic responsibilities, with cost savings now a driver of profitability.

But that’s not what most of them signed on for.  Today, there are new challenges for procurement leaders.  The demand for supply chain transparency, accountability and sustainability is just one of them.  Companies are seeking new ways of delivering on the ethical commitments they’ve made to consumers and they’re recruiting procurement leaders to help them make that happen.

So, for procurement leaders, the rubber is meeting the road.  But in these challenges, there’s also great opportunity for procurement professionals to become integral participants in strategic sourcing that does more than hold the budget line.

Transformation

The role of procurement is being rapidly transformed and that transformation will only become more apparent over the next 10 years.  Their roles are growing to encompass brand integrity and advocacy for sustainable supply chain practices. They’re becoming supply chain cops who ensure that what’s said at the top of the chain trickles down as practice.

And companies who adopt this style of managing procurement are positioned to exceed the efforts of those who don’t.

They’re learning to not only manage risk but to anticipate it.  In a world of Big Data, this is how it’s put to superior use. The data garnered by the emerging transformation in procurement will play a huge part in that advantage, propelling the bold ahead.

Millennials driving change

As Millennials become the consumer market most sought out, their consumer decision-making process for will increasingly come to the forefront.

Part of that decision-making process concerns the ethical conduct of business with respect to where things come from, how they’re made and who’s making them.   Not responding to this impulse is tantamount to waving on the shore, as your cruise liner makes a bead for the Bahamas.

This cohort is changing the way companies do business by demanding supply chain transparency and what’s more – a less disposable commercial landscape.  They desire a world of reduced waste, the increased availability of locally-sourced goods and ethical practices abroad, when that’s not an option.

The numbers game

Procurement leaders would be well-served to start learning more about the way the money goes around and around.  For now, their financial focus has been on simple costs for goods, services and all the nuts and bolts of getting them to clients.

To meet the extraordinary challenge of supply chains gone global, their financial skills will need to experience a rapid expansion.  Already, there’s a trend toward integrating the emerging value of procurement with the skills of finance, creating a Center of Excellence which teams the two in common purpose.  Companies are taking note that this alliance holds in it endless promise and explosive power.

To procurement leaders, all this will sound familiar.  They may even be a little nervous about the challenges they’re facing.  But they’d be well-served to remember that is procurement’s special day and to seize it.

CenterPoint Group is a trusted procurement advisor.

The post New Challenges for Procurement Leaders appeared first on Centerpoint.

source https://centerpointgroup.com/new-challenges-for-procurement-leaders/

Do You Receive Detailed Reporting of Your Spend?

You’re a big picture person.  You know the basics about your procurement budget, but you may not have a handle on the finer details.

That can mean money’s flying out the window.

You can’t be everywhere.  You can’t know whether Betty in Denver is procuring in a less than efficient way.  There’s no way to know if Ted in Houston has gone light bulb crazy in the wake of a sudden shortage.

And how long will those lightbulbs be collecting dust so Ted won’t be caught holding the (spent) light bulb again?

Your operations are all over the place, so there’s a good chance your indirect spend is too.  Do you receive detailed reporting of your spend? Probably not, right?

You’re not alone.  There are responsible people all over the USA dealing with a lack of transparency and centralization in procurement.

And when you don’t get the deets, how can you know whether your spend is efficient and serving your company?

Knowledge is power

At CenterPoint Group, we fill in the reporting gaps, with total transparency that lets you know exactly what’s going on.  No more Betty in Denver. No more Ted in Houston. Your procurement gets detailed, centralized reporting that lets you see the details in your spending big picture.

With our proprietary software, we stay on top of even the most high-transaction spends with an ongoing data feed from individual suppliers.  We bring you insight, which amounts to knowledge, which gives you power.

Eyes on the prize

Errors on your billings aren’t left to languish with CenterPoint.  We ensure accuracy by keeping our eyes on the prize.

That includes paying keen attention to pricing changes, being aware of products which have been discontinued and knowing what’s going on beneath the surface of your spend.

And we don’t stop there.  Markets change and so do your buying patterns, so we periodically optimize our processes to ensure you’re still getting the best deal possible.

We’re always in negotiation mode, so you and your people don’t need to be, getting you optimal pricing over a wide range of regular purchases.

Data matters

Detailed reporting of your spend relies on data, which provides all the information you need to maximize your purchasing power.

Procurement is being revolutionized by big data, which points to opportunities which can save you money.  Intuition and instinct are great things to have, but they’re supported by concrete data that tells you the unvarnished truth, allowing you to respond rapidly to challenges and resolve them effectively.

With our proprietary software, every transaction is analyzed, meaning you get every detail and every detail matters when you’re optimizing your spend.

The power of numbers

Our members get the purchasing power of numbers, represented by over $850 million of collective, indirect spend.

With that kind of clout behind you, you get the pricing that only larger companies with bigger budgets usually have access to.

And CenterPoint has the kind of negotiating leverage that holds the pricing line, allowing you to focus on other areas.  Contact us to find out more.

The post Do You Receive Detailed Reporting of Your Spend? appeared first on Centerpoint.

source https://centerpointgroup.com/do-you-receive-detailed-reporting-of-your-spend/

Don’t Have Time to Run an RFP?

So, you don’t have time to run an RFP.  Well, who does really?

Requests for Proposals are time-consuming affairs (the average RFP eats between 350 and 500 hours) and once you’re done, who’s to say you’re going to net any benefit?  

When you’ve got a short turnaround time to obtain proposals from vendors and services suppliers, the RFP process can be an exercise in futility that demands more than it delivers. And you may not have those precious hours to expend.  

In this blog, we’ll talk a little about why that is and then, a better way to undertake the process.

Time is money

Putting together an RFP is a major undertaking.  It can take weeks or months to develop requirements.  Then, there’s formatting. Next, you need to compile prospective suppliers and finally, collate and analyze responses.

But you know what?  RFPs take up precious time on the supplier side, too.

And where’s the guarantee for suppliers that you’re not just fishing?  Suppliers these days cast a jaded eye on RFPs coming through the door and may be less inclined to respond.  That means you’re not getting a 360 of what’s out there.

Suppliers need to know that the RFPs they’re looking at are geared to building a better mousetrap. They need to know they have a chance at a successful bid and aren’t just spending valuable resources chasing a ghost.

Getting around RFPs with a GPO

A Group Purchasing Organization is the way companies like yours are bypassing the onerous RFP process, saving them human resources, time and money.

You don’t need to hunt down sometimes reluctant suppliers’ proposals with a GPO, because that work is already done.  Because a GPO leverages the collective resources of its members, your buying power increases. You’ve got access to bulk purchasing you’d never have on your own – RFP or no RFP.

Savings and efficiencies

A GPO can save your company between 10% and 35% on indirect spend.  By having access to better pricing because of the power of numbers (our members), you save money.  But you also streamline your procurement function, making it more efficient and cost-effective.

No more time-consuming RFPs.  No more complex negotiating process with multiple suppliers.  Your GPO has that covered.

What’s more, your record of purchasing for the past year allows a GPO to forecast cost savings, helping you budget more effectively.

A GPO centralizes procurement.  You’ll still make all the decisions that matter but your human resources’ hands will be freed to pursue more productive work.  No more continual wrangling with suppliers to get the best price.

Puff yourself up

One of the great beauties of the GPO way of doing things is that your small or medium-sized business puffs itself up to the size of a much bigger company, gaining you the attention of big-name suppliers.

Because you’ve got the power of numbers behind you, you’ve got major league clout that brings you savings from top-drawer market players.

With CenterPoint Group, you can kiss RFPs goodbye.  The power of numbers sets you free.

The post Don’t Have Time to Run an RFP? appeared first on Centerpoint.

source https://centerpointgroup.com/dont-have-time-to-run-an-rfp/

What Are Some of Your Current Challenges in Purchasing?

We’ve all got our problems and procurement professionals are no exception.  As with every business sector, procurement is facing economic, social and technological change that’s coming fast and furious.

It can be a little disconcerting how quickly things can change in a dynamic landscape like the one we’re in.

So, what are some of your current challenges in purchasing?  We’re willing to bet they’re not that different from those of professionals elsewhere, with finding the right people being a big one.

In a jobs market with more vacancies than people hoping to fill them, the kind of talent procurement needs is thin on the ground.  Retaining it when you finally find it can be tough, too. Then there’s downward pressure on pricing, arising from fluctuations in the prices of commodities and services.

Finally, procurement’s ability to absorb change and emerge from its rigors victorious is a major concern. Change doesn’t wait.  People are accustomed to doing things a certain way and sometimes, that puts the brakes on positive change that can benefit your company.

In this post, we’re going to tell you how CenterPoint Group can put these challenges to rest.  We’re a purchasing partner that gives you what you need to produce exceptional results in procurement.

Talent?  We’ve got it

CenterPoint’s teams consist of procurement professionals, former employees of suppliers and business professionals who bring our customers all the right talent to bring their purchasing processes up to the minute.

With 15 years of data and market experience, we’re a team of seasoned experts who have served 20% of the Fortune 500 during our tenure in this sector.

We are the talent you’re seeking and we stick around for as long as you need us.

Shifting economic sands are no match for CenterPoint

While it’s true that the market is volatile, there’s no cause for alarm with CenterPoint Group in your corner.  We bring you indexed pricing and caps which preclude market volatility, taming it so that you know what to expect.

Employing key data, we look at your last year’s purchasing figures, analyzing them and forecasting your needs.  You know what you’re getting into with CenterPoint, so that the market and its vagaries are somebody else’s problem – not yours.

Facing change head on

Big data only sounds scary.  What it is, in truth, is your ticket to more responsive purchasing process that identifies trends and market realities and gets ahead of them.  Big data can also track every transaction in a complex purchasing setup, ensuring that nothing falls between the cracks and that every purchase you make is fully accounted for.

Global purchasing, done right, is a process of creating greater efficiencies and streamlining operations.  And the ability to make those wonderful things happen is what big data gives us.

That’s why we face change head on at CenterPoint.  Because we’ve done it, our members benefit, with insights that set the scene for superior savings and increased efficiencies.

If purchasing challenges are keeping you up at night, contact us.  We’ll get that seen to.

The post What Are Some of Your Current Challenges in Purchasing? appeared first on Centerpoint.

source https://centerpointgroup.com/what-are-some-of-your-current-challenges-in-purchasing/

Are You Tired of Not Getting Top Level Customer Service from Your Suppliers?

Your company spends a lot of money with your suppliers, so when you call them with a problem, a question or a complaint, you expect to find someone on the other end of the phone with a solution, an answer or a response.

But you don’t.  You leave messages.  You send emails. Nothing.  Sometimes you think your supplier is just a figment of your imagination or perhaps a disembodied robotic presence, like Hal in A Space Odyssey.

But even a disembodied robotic presence can answer a question.

Are you tired of not getting top-level customer service from your suppliers?  If you’re reading this, that’s probably the case. Maybe it’s slow response, late deliveries, or incomplete orders, but whatever it is that’s getting on your nerves, you’re not alone.

Customer service.  A quaint vestige of the past?

People everywhere are talking about a trend in customer service that doesn’t bode well.  It seems that wherever you go, attentive, responsive customer service has become a quaint vestige of the past.

Ask for help online, sometime and enter a maze of pages and sub-pages which seek to answer your question.  You may finally arrive at a complaints page, but the void your complaint is conveyed to sucks it into its depths and a response is never received.

Or, you may encounter a friendly “customer service chat” which only frustrates you further, as the chirpy words being offered to do nothing to solve your problem.  It’s frustrating!

But at CenterPoint Group, customer service is as 21st Century as our use of data to track every transaction and interaction in your supply chain, ensuring that nothing falls between the cracks.

We believe in customer service because it’s a big part of what we do.

Connecting with you

CenterPoint Group GPO’s members get the kind of customer service most people only dream of.  The suppliers we work with are required by the terms of our agreements with them to provide you with a dedicated account manager.  And that’s just the beginning of our best-in-class customer service.

Your supplier-side account manager has a twin at CenterPoint.  When you need mediation, CenterPoint is there to smooth over any misunderstandings and get everyone to “yes”.

At CenterPoint, we make sure you’re not left hanging when you’ve got a problem, a question or a complaint.  

No disembodied robotic presences here.

The concierge treatment

Concierge level treatment is the highest form of customer service and that’s what we practice at CenterPoint.

We personalize our services to meet your needs, guaranteeing seamless implementation, a streamlined billing process and a web ordering platform that’s custom-tailored to you.

Your CenterPoint Customer Service Representative is your link to getting the best from suppliers.  There’s no ambiguity about who the customer is when you’re enjoying concierge customer service with CenterPoint.

21st-century service

If you’re tired of not getting top-level customer service from your suppliers, then it’s time to make the leap to CenterPoint.  Contact us to find out more about our 21st-century customer service.

The post Are You Tired of Not Getting Top Level Customer Service from Your Suppliers? appeared first on Centerpoint.

source https://centerpointgroup.com/not-getting-top-level-customer-service-from-suppliers/

Are You Reviewing all Possible Spend Areas of Your Business?

What your business spends money on is a whole lot of different things.  When it comes to indirect spend, you may not be quite sure what’s going on under the hood.

Are you reviewing all possible spend areas of your business?  It’s highly likely that you’re not, because it’s a big conversation with a lot of moving parts.  From safety to office supplies, energy to wireless telecom, your spending on daily business needs is distributed to a lot of different categories.

CenterPoint Group is the answer to drilling down into your purchasing to find out where the money’s going and how less of that money can go there.  Because you’ve got enough going on, you can’t keep tabs on every aspect of your spending.

But we can.

Immediate results

When you join CenterPoint Group, you’ll see results in under two weeks.  But those results grow with time.

Your savings are sustainable with CenterPoint because you get multi-year protections derived from indexed pricing and caps.

With CenterPoint, price increases are rare.  We’ve got the negotiating leverage needed to ensure that favorable prices stick.  That lets you relax, as your spend is brought under control with the oversight of your trusted procurement advisor – CenterPoint.

MRO magic

Maintenance, repairs, and operations (MRO) is a huge spend area, encompassing everything from machinery and parts to cleaning supplies and other daily needs associated with the conduct of your business.

There are literally thousands of categories and sub-categories which combine to create MRO, so it’s unlikely you’ll get a handle on all of them without the support of a GPO like CenterPoint Group.

So many companies distribute MRO purchasing across multiple locations, but that’s not efficient.  With CenterPoint, MRO is centralized, streamlined and costs are reduced. This is a complex area which requires a practiced, focused hand and you’ll get that, with CenterPoint.

Pre-negotiated agreements.

CenterPoint offers members category expertise in key areas like MRO, office supplies, safety and PPE, wireless and energy.

With a strong command of markets and category expertise, we dispense with the need to spend valuable human resources hours on RFPs which may or may not bear fruit.

We’re able to create highly competitive agreements for our members which bring them best-in-class terms and conditions.  That saves you the complex, time-consuming business of negotiating with multiple suppliers.

You save time and money when CenterPoint is reviewing all possible spend areas of your business.

Value. Leadership. Integrity

With total transparency and accountability, CenterPoint brings you finely-tuned, outsourced support that gets you the cost savings you need to meet your goal, creating a Center of Excellence in procurement.

We bring our members value.  In only two weeks, you’ll see what we mean.  With no long-term commitment required from you and no minimum purchases, you’ll see our value while barely lifting a finger.

CenterPoint leads and innovates in the strategic sourcing sector with over 10 years of market and data experience.  And our knowledge delivers.

Contact us to experience the power of numbers with a trusted procurement advisor – CenterPoint Group.

The post Are You Reviewing all Possible Spend Areas of Your Business? appeared first on Centerpoint.

source https://centerpointgroup.com/reviewing-all-possible-spend-areas-of-your-business/

Vendor Managed Inventory

There’s good reason that giants like Walmart and Home Depot work with the Vendor Managed Inventory model.  This type of supply chain arrangement makes a lot of sense for both parties and creates a symbiosis which keeps needed supplies and goods on hand, without overstocking.

This type of supply relationship allows information to be shared electronically between the buyer and the vendor.  The data obtained through mutually accessible software solutions allows inventory needs to be forecast, using statistical analytics.

You know that if the big boxes are using this method of procurement for at least some of their operations that there must be something to it, so let’s take a closer look.

More information.  Faster.

One of VMI’s most attractive features is undoubtedly the facility it offers for sharing more information, faster.  It’s in the flow of information and the way it’s deployed that the secret of this methodology lies.

By aligning business objectives and streamlining supply chains, every facet of operations on both ends of the arrangement benefit.  Inventory is less likely to languish, service is drastically improved and sales are increased.

It’s in the flow of information that all these ends are achieved.

Key information flows between vendor and buyer, allowing for precise calculations to be made concerning inventory.  Coupled with monitoring and reporting, the supply chain is refined because needs are accurately identified.

Information makes the wheels go around

Beginning with the provision of a Product Activity Report from the buyer, the vendor is given access to key information on transfers and sales, as well as what’s on hand, what’s in the pipeline and what’s scheduled to be there next.

From this information, VMI software determines timelines for restocking.  Information about the product’s position in the chain is constantly monitored to ensure that the information reflects all factors, including exceptions.  Then, a purchase order is issued to the supplier. Next, the PO is acknowledged by the buyer.

Total supply chain transparency

Besides all that ultra-useful and revelatory information, VMI provides a level of transparency that serves everyone exceptionally well.

Information is reported to both vendor and buyer and is always available on demand.  Mutually agreed upon measurements against stated objectives like turnover, in-stock data and transaction costs are monitored and reported on, ensuring that everyone’s on the same page – streamlining the supply chain and creating a value center in procurement.

Is VMI for you?

Vendor Managed Inventory is a deceptively simple methodology, but you need to have all the components required to make it work for you at its most dazzlingly effective.

CenterPoint is a trusted procurement advisor with 15 years’ experience bringing quality procurement solutions to companies like yours. Our experts are seasoned procurement professionals who have served 20% of the Fortune 500 over the past decade.

We leverage $850 million of indirect collective spend to save you money on your daily business needs.  We do it with the power of numbers, keen data analysis, and focused account management that deploys data to get you what you need.

Is VMI for you?  Contact us.  Let’s find out!

The post Vendor Managed Inventory appeared first on Centerpoint.

source https://centerpointgroup.com/vendor-managed-inventory/

How to Increase the Effectiveness of Cost Saving Initiatives in the Second Half of 2018

Cost savings initiatives come and go and in the aftermath of all that apparent cost cutting, how do we assess the success of what we’ve done?

All too often, success is declared based on spending not increasing.  That’s not saving money. That’s holding the line.

You may well gauge the success of a cost savings initiative according to the amount of time expended.  If you save time, it’s arguable that you’ve saved money. The same may be said of increasing efficiencies.  But were costs a reduced? Did a line item shrink?

You’re still paying all the people involved in the initiative and in most cases, those people aren’t being paid by the hour.  Do the math – that’s not cost savings.

This post is about how to increase the effectiveness of cost savings initiatives in the second half of 2018.  You started out the year thinking you’d get there and you still can.

Real cost savings

The only real cost savings that mean anything are those which directly and visibly reduce specific line items in the budget.

If your cost savings initiative is, alternatively, avoiding costs, that’s not the same thing.  You’re addressing the numbers on the balance sheet. When you’re done, those numbers should be smaller.

In your planned spend are the seeds of real cost savings.

Widen the scope of your quest

Kicking off a cost savings initiative with one large target in mind may seem attractive (even heroic), but success will be had in widening the scope of your quest.

To begin with, lopping off chunks of one item is bound to de-stabilize the integrity of the target.  Cost savings are best distributed throughout organizations to reduce impact that might have such an effect.

Instead, choose at least 10 targets with smaller goals which add up to the kind of cost savings you’re seeking.  Aim for areas in which minimum impact delivers lower-value cost savings. Cost savings initiatives which operate from this principle tend to be more successful, as they aim to streamline, integrate and eliminate extraneous or obsolete functions.

Consolidation

Incremental cost savings approach the project by looking at ways non-mission-critical expenses can be reduced.  If your company holds training days, find ways to combine these with seasonal celebrations. One event costs less than two.

Another consolidation effort is in personnel.  We all know this is true – that every company is home to employees who aren’t as busy as they might be.  Underperformers who’ve made it through previous cost savings efforts can be given more to do and the duties of roles left vacant to spare payroll can be divvied out to them.

Procurement

Procurement is a key area in which superior cost savings can be had through enhanced efficiencies.  One of the most effective ways to achieve that is with a Group Purchasing Organization like CenterPoint.  You join with other members to enjoy bulk discounts and major savings.

CenterPoint Group is your best bet for cost savings in 2018.  Contact us.

The post How to Increase the Effectiveness of Cost Saving Initiatives in the Second Half of 2018 appeared first on Centerpoint.

source https://centerpointgroup.com/increase-the-effectiveness-of-cost-saving-initiatives-in-2018/

Have you performed an RFP for your MRO recently?

The Request for Proposal process tends to be a drawn out one.  There’s much to do in defining the scope of the job on offer, as well as its technical requirements and detailed requests for contractor/vendor information.

But when you’re readying an RFP for Maintenance, Repair and Operations, you’re dragging a rock uphill.  At least, that’s what it can feel like, due to the complexity of MRO.

And once you’ve successfully navigated your RFP, having fully articulated your needs to prospective contractors and vendors, are you any closer to the goal of project satisfaction?

Have you performed an RFP for your MRO recently?  We’re willing to bed you haven’t. But if you have, you’ll know that it’s a time-consuming process with results which are often mixed.  It’s also likely that you’ve yet to run an RFP that has you spiking the ball in the end zone, right?

Let’s look at some the reasons RFPs for MROs go sideways and how you can kiss the process goodbye.

On the defensive

The very nature of the RFP process, regardless of sector, is that it places you in a defensive stance.  You issue RFPs as “sniff tests”, designed to protect your organization from the possibility of loss and risk.

You’re not reaching out to like-minded organizations who share your values.  You’re reaching out to find the least risky prospect. While self-preservation is a human instinct, it can kill creativity in your organization, by denying it partnerships which are mutually beneficial.

While you need to protect your interests, you can sometimes miss the forest for the trees if that’s your sole focus and too often, it is with RFPs.

Consensus decision-making

While consensus in decision-making is a desirable and noble goal it’s also clear that this style of arriving at a decision is fraught with peril.

Consensus means everyone agrees.  Everyone. Think of the movie “12 Angry Men”.  While it may be a dramatic analogy it’s also instructive, as the jurors in that film certainly took their time.

An RFP is intended to find you the right stuff to get the job in question done.  When that’s what you’re going for, then isn’t it best that you obtain said “right stuff” as efficiently as possible?  If you want to get the job done, that goes without saying.

RFPs – on the way out

Take a quick tour around the interwebs and you’ll notice that there are more and more voices being added to the growing anti-RFP chorus.  There’s certainly a vocal contingent of people recognizing this traditional process as having reached its expiry date.

Companies are beginning to understand that work deriving from RFPs doesn’t stick.  Those who issue them tend to be obsessed by the process itself. And on your side, you’re reading this because you’re casting a jaded eye on the effectiveness of the RFP process, yourself.

A better way to procure

CenterPoint Group is a trusted procurement advisor.  We’re a better way to procure because we spare you the pain of RFP for MRO.  Contact us.

The post Have you performed an RFP for your MRO recently? appeared first on Centerpoint.

source https://centerpointgroup.com/have-you-performed-an-rfp-for-your-mro-recently/

Don’t Waste Time Running a RFP – use a GPO

RFPs are rapidly becoming the old way of doing things.  As more companies give these time-consuming, tedious processes the side eye, GPOs (Group Purchasing Organizations) are coming into their own as a better way of doing procurement.

Sure, we’re biased.  CenterPoint Group is a trusted procurement advisor (also known as a GPO) that eliminates the need for human resource-heavy RFPs.

So, don’t waste time running an RFP – use a GPO.  Save time, frustration, people power and less-than-stellar results by going with someone like CenterPoint.  Let us convince you!

A better use of resources

Joining a GPO presents amazing benefits to members and one of the most compelling is an improved deployment of resources.

Because CenterPoint works with the pooled resources of its members, we represent colossal buying power.  With $850 million of collective indirect spend at our disposal, you get pricing that’s usually reserved for large scale players.

The legwork is done

The fact that an effective GPO like CenterPoint can achieve the cost savings your desire is well-established.  But direct cost associated with the items you’re procuring is just the beginning.

You save money on the legwork associated with finding the right vendors and products for your supply chain.  GPOs like CenterPoint perform the market analysis, RFP, contract formulation and negotiating. Creating the procurement conditions of your dreams are achievable in weeks instead of months, with a GPO.

Beyond group purchasing

Getting the price breaks only big buyers usually get is great, but CenterPoint offers you more.  We’re data-based procurement professionals who offer you analytics, focused account management and reporting that keeps you abreast of changes you need to be aware of.

While we’re doing all that, your procurement professionals are freed to move their operations to a category-based model that’s more finely-tuned, offering you an even more advantageous position when purchasing your daily needs.

And members enjoy a unique networking opportunity, which creates a forum for the exchange of information and ideas to make even more of procurement than your GPO already does.

Low-risk.  High-value.

If, like many other companies out there, you’re looking for ways to rid yourself of the tiresome, labor-intensive RFP process, then CenterPoint is ready to share with you the magic of the GPO.

Seriously.  Don’t waste time running a RFP – use a GPO.  This is a low-risk, high-value proposition that more fruitfully deploys your resources – both financial and human – while netting you superior pricing and the opportunity to create even better opportunities for your supply chain, with enhanced knowledge.

Get the CenterPoint edge

For a decade and a half, CenterPoint has been working with companies like yours to improve their procurement practices.

Our team comes from the procurement arena and boasts extensive data management expertise.  The three pillars of what we do are concise – value, leadership and integrity. On those three pillars stand our effective, data-informed model for bringing you a strong, reliable supply chain than saves you money and keeps your business ticking along like a well-oiled machine.

Ready to jettison RFPs?  Contact us.

The post Don’t Waste Time Running a RFP – use a GPO appeared first on Centerpoint.

source https://centerpointgroup.com/dont-waste-time-running-a-rfp-use-a-gpo/

Is your MRO program managed by procurement?

Every year, US businesses spend over $100 billion on MRO purchases.  Everything from cleaning products to light bulbs falls under the heading of Maintenance, Repairs, and Operations.

But every year, inventory languishes on the shelf in supply rooms across the nation.  Why? Simply, about half of US businesses aren’t effectively managing MRO. Grainger’s Consulting Services arrived at this shocking evaluation, revealing that these companies are basically paying to store inventory which becomes obsolete before so much as seeing the light of day.

And that’s not a great use of resources.

Is your MRO program managed by procurement?  Or is it in the hands of other stakeholders, all with individual agendas?  Empire building, over-estimating need, and budget-padding are just some of the results of taking a haphazard, de-centralized approach to MRO.  Let’s look at some of the reasons that managing MRO more attentively and professionally is in your best interests.

The managed approach

When MRO is done on the ground (especially if you have operations in multiple locations), there is no overarching control mechanism to ensure that only those items needed are purchased.

Using data from inventory and process allows you to manage MRO based on historical information.  This methodology frames MRO as an operational necessity, opening the door to a more hands-on, analytical approach that avoids over-stocking.

The foundation of the managed approach to MRO is data.  This is crucial information which provides a window into past stocking practices and how they stack up against need.  In the data, you’ll discover patterns which can inform purchasing habits.

From there, asking the right questions is the way forward.  Knowing what’s in stock, what it’s there to do and how often it needs to be replaced translates into data that allows you to more efficiently manage MRO, controlling the costs involved.

Getting leveraged

When your MRO program is leveraged, it becomes a value center and a crucial part of your business strategy.  Centering MRO in procurement creates a framework which has its eye on all links in the supply chain and a clear idea of what’s in stock, what it’s there to do and how often it needs to be replaced – because you’ve set up the data foundation for procurement to leverage MRO.

Discipline is key to this approach, as keeping a handle on MRO needs means there’s no more ad hoc transfer of items.  Someone’s minding the store and someone is accountable – a keyword.

That means less languishing inventory and that’s a good thing because languishing inventory is like money gathering dust on the supply room shelf.

There are better uses for money, we’re sure you’ll agree.  And when procurement manages your MRO, that money will be soon be doing other things because leveraged MRO reframes the program as a key engine of your business.  

At CenterPoint Group, we bring you the power of numbers and data analytics that help you make the most of your MRO program.  If you’re ready to revolutionize your MRO, contact us.  We’ll give you the tools you need.

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