by Jennifer Ulrich, Project Analyst, Source One
In this continuing series, Jennifer Ulrich shares her experiences in the trenches of executing strategic sourcing projects, to give you practical insights into best practices.
When working with your sourcing experts or suppliers, collaboration can be a vital aspect in the success of developing cost savings opportunities. We experience teamwork in all aspects of society and even at the most biological levels. In nature, it is common to work as a team to exploit opportunities, so it makes sense to tap into that innate behavior for the same purpose in business. Your organization, like most these days, is looking for ways to reduce costs and streamline processes. Setting up a collaborative environment and making it work to your advantage can often produce better results than individual effort.
If this is not something your organization is already practicing, the best way to start is by looking within. Where are you struggling the most and what internal resources are available to tackle the problem most directly? The most effective resources are those that are closest to the situation in question. They are most familiar with the roots of the problem and have access to materials such as contracts, invoices and the like. These resources should also include solid decision makers so that hurdles can easily be overcome throughout the process.
Once a team has been developed internally and you have determined what the focal point of savings should be, you should identify the suppliers and the sourcing expert, if you plan to use one, which you will include in the initiative. All parties should be open to receive, and able to provide, constructive criticism. Suppliers are most likely going to be open to teaming in some form, not only to retain or earn the business but also to improve their practices as well. Keep in mind that while this concept can create a wealth of ideas and prospects, it may be difficult without the buy-in from the right people in your organization and from the supplier, so make sure to take the necessary steps to sell the idea of collaboration before jumping the gun. Sourcing experts require the same dedication from the organization as suppliers, in that the internal team should be receptive and open to sharing their expertise and resources to achieve a common goal.
The next step is to set up meetings with those involved to facilitate brainstorming activities. You should ensure that you “drive” these meetings so that they produce effective results. Some tips to help ensure this include:
- Prepare an agenda – have an itinerary prepared with a definite goal in mind to accomplish by the close of the meeting.
- Set the tone – ensure that the meeting starts off in the right direction by communicating an open table environment and restating your goal(s) in calling the meeting, e.g. reduce costs in operations by 8 to 10%.
- Clarify roles – everyone in the meeting should have the opportunity to share their roles both in the organization and in the meeting so that there is no confusion once the initiative begins.
- Steer the meeting – while a free-flow environment is encouraged, ensure that the meeting still follows the agenda. Start with discussions defining the problem, then move on to ideas on how to overcome those issues, followed by ways to implement procedures. Of course, all of these ideas are in the early phases, but such discussions get the creative juices flowing.
- Follow up, follow up, follow up – at the end of the meeting, set a date and time to reconvene and allow discussion and input on next steps. Send a follow-up message after the meeting or the next day with an overview
All of these activities are great steps in the right direction, but it is up to you and your team to make sure that the progress continues. People tend to believe that implementing new ideas and cost savings is the final step in the process, but it is the follow-up and monitoring step that is most vital. Organizations are constantly evolving along with technology and innovations, so monitoring your progress to adjust for these changes can lead to greater initial success and longevity.