Managers who want to launch a Value Sourcing initiative should consider these questions:
- Is sourcing seen as driving revenue growth as well as cost reduction?
- Are we maximizing the value of our supplier relationships?
- Have we segmented our spending and identified strategic categories and suppliers?
- Do we understand and are we positively affecting supplier economics?
- How collaboratively do procurement, users, and key suppliers work on new product development?
- Are our product and service specifications up to date? Do they strike the right balance between technical need and total cost?
- Are there significant portions of spending under the control of the user community with little involvement from Procurement?
- What portion of spending could benefit from a global or regional approach?
- Do we have the internal capabilities to ensure a generation of continued gains?
- Is procurement of equal importance to engineering and operations in the company?
- Can we use Value Sourcing to transform the organization?
- How do we gain buy-in and motivation with key managers?
- What are the right and cost-effective digital tools to apply?
Stop Thrashing Your Suppliers: Focus on value and profits, not just cost, in the sourcing process
by David Bovet
Mercer Management Journal, Issue 14