Do you close your bid with a handshake or signing on the dotted line? Managing spend in business startups is as simple as shaking hands but in today’s risky global economy, managing risk has become a critical step in the procurement process. You can’t pin the tail on one donkey and expect the party to run smoothly. Procurement is a different game – it’s a game with more players, slimmer margins, leaner business solutions and most times, managed through electronic bidding and communications.
In 2011 a greater focus has been placed on risk management. How do you rate your supplier in this area? Do you have a contingency plan in place? Do you have a supplier management process in place? How much time do your sourcing specialists apply towards developing supplier relationships to keep the communication open when they run into financial trouble or can’t deliver? What are the big players doing in this area? How do you rate in the area of sustainability? These are questions you have to build in to your spend management process.
If you are a category specialist you most likely have experienced some level of risk in working with a single supplier. In this case, when options are not available, one of the critical keys to success is managing risk through regular ongoing communication. Stay in contact with your suppliers on a regular basis, especially if you share documents around the globe. Communication and technology are the focus in 2011, staying in touch will save you time, money and margins. Keep your finger on the pulse of your single supplier; it’s your company’s lifeline.
(c) 2011 Spend Radar