Sourcing your way to better profits

| 0 Comments
DeonMocke.JPGA report compiled by Ariba for SmartProcurement

In today’s economy, a strategic approach to sourcing and procurement is critical for meeting immediate needs as well as for achieving and sustaining long-term cost reductions. “Locating a supplier and pricing an item simply isn’t enough,” says Deon Mocke, Regional Vice President, Ariba Africa.

Sustainable savings come from identifying cost-cutting opportunities, defining and executing a supplier selection process, and creating contracts that convert them into actual savings. This requires being able to evaluate the total cost impact of sourcing decisions, while shortening the amount of time and effort spent on administrative tasks.

Effective supplier discovery and supplier information management are critical for the sourcing process to drive sustainable results. Engaging with suppliers strategically delivers a strategic competitive advantage that can yield new products, improved quality, better innovation, and much more.

Smart sourcing and procurement not only provides a cost advantage—it also allows your company to win more deals. It provides your business with the opportunity to become more profitable, which attracts a premium on shares. It also enables good corporate governance, which helps to maintain a solid reputation and value in the eyes of investors.

Strategic sourcing provides the single greatest opportunity to impact the cost, quality, and performance of the supply chain and is among the quickest paths to lower costs and improved revenues. But increased globalisation, soaring energy and commodity costs, and tightening supply markets have kept many companies from achieving their full sourcing potential.

You want best-value sourcing agreements—the kind that provide sustainable savings. That takes the right strategic sourcing environment, one that's connected to a powerful supplier network and built with superior tools, expertise, and information. Only then can you stimulate enough competition among qualified sellers to cut costs while minimising risks.

Reverse auctions allow sellers to compete for business on which they may never have had the opportunity to bid in the past. And the myths surrounding reverse auctions and online sourcing events—such as damaging supplier relationships or ending up with higher prices—are just that, myths. The reality is that strategic sourcing is a win-win scenario for both your business and suppliers.

For example, one company in the IT Hardware & Procurement industry that worked with Ariba received a total of 64 bids across five lots. The auction lasted a total of two hours and two minutes—including extensions—and achieved 35 per cent savings against the aggressive baseline.

Another company, in the Office Supplies industry, conducted an auction consisting of 50 bids across both lots that lasted an hour and 39 minutes, including extensions. The results speak for themselves: lot 1 achieved a 20 per cent saving from baseline, and 8 per cent incremental savings from the best negotiated manual quote; lot 2 achieved a best discount result of 52 per cent off vendor catalogue.

The Ariba Sourcing™ solution tightly integrates with the Ariba® Network to deliver the best sourcing events, as well as:

  • Connections to more than 730 000 suppliers.
  • Quick and easy supplier discovery.
  • Up-to-date supplier information.
  • Intuitive RFX tools for RFI, RFP, and auctions.
  • Patented competitive-bidding and timing options.
  • Automated and adjustable negotiation processes.
  • Access to Ariba’s sourcing partners, experts in category intelligence.

While it is important to leverage technology-based solutions to streamline procurement processes and savings across categories - proactively driving compliance is absolutely critical.

Ensuring compliance is the only way to guarantee that negotiated savings make their way to the bottom line. The effective procurement of goods and services requires a standard process followed by employees across an organization and an easy-to-use, consumer-like interface to facilitate it.

Control your spending, collaborate with suppliers, and contribute to the bottom line. Those are your top priorities in today’s economy.

Buying smarter isn’t just buying at the lowest price. It involves knowing everything about your company’s spending habits, and using that knowledge to be a stronger negotiator. It is being connected to a diverse network of high-quality suppliers, so you can quickly discover collaborative partners who can lower your costs for goods and services while minimising your risks. And it is contracting and procuring in ways that ensure compliance.

As the world’s business commerce network, Ariba combines cloud-based applications with a web-based trading community to help companies like yours discover and collaborate with a global network of partners. And the quick deployment and lack of maintenance associated with the SaaS solutions ensure that your company realises value quickly.

To learn more about how your company can employ a strategic sourcing initiative to improve the bottom line, contact Graeme Yates at gyates@ariba.com.

Leave a comment


SmartProcurement Newsletter
X

Please enter your details below to receive the SmartProcurement Newsletter for FREE on a regular basis.

As part of the SmartProcurement Newsletter you will be receiving World Class Procurement News, Tools, Tips, Tactics, Procurement Training updates, Upcoming Events, and the latest Procurement Career Openings.

* Email Address:
* Title:
* First Name:
* Surname:
* Company:
  Position:
* Country:
* Public / Private:

 

Career opportunites

Demand Planning Manager

  • <500 000 Gauteng Operations, Planning & Inventory Projects / Category Management
(Total Cost to Company R750k - R900K) excluding ...More

Global Category Manager: CONTRACTS

  • <500 000 Buyer Commodities Contract Gauteng
Total Cost to Company R1mil - R1.2mil excluding

Project Manager :12-18 MONTH CONTRACT

  • <500 000 Contract Procurement Officer / Specialist Projects / Category Management
Description:A well-known retail organization is looking for an ...More

Procurement Analyst

  • <500 000 Analyst Gauteng Permanent Procurement Management
Description:A leading infrastructure development group with strong presence ...More

Commodity Manager: Fuels and Lubes

  • <500 000 Commodities Gauteng Permanent Strategic Sourcing
Description:Ensuring continuity of supply in line with business ...More

Senior Facilities Manager

  • <500 000 Gauteng Operations, Planning & Inventory Permanent Projects / Category Management
(Total Cost to Company R800K - R900K) Description: ...More

Supply Chain Analyst

  • <500 000 Analyst Permanent Supply Chain Western Cape
(Total Cost to Company R350K - R550K) SOUTHERN ...More

Demand Planner

  • <500 000 Gauteng Operations, Planning & Inventory Permanent Supply Chain
(Total Cost to Company R450k - R550k, dependent ...More

Procurement Specialis

  • <500 000 Gauteng Permanent Procurement Management Procurement Officer / Specialist
(Total Cost to Company R700k - R800k including ...More

Solutions Architect

  • <500 000 Analyst Gauteng Operations, Planning & Inventory Permanent
(Total Cost to Company R1.3Mil - R1.1Mil including ...More

Engineering Manager

  • Gauteng Industrial Engineer Permanent Procurement Management
Total Cost to Company R850k - R950K including ...More

Country Head of Procurement

  • Permanent Procurement Management Procurement Officer / Specialist
https://careers.peopleclick.com/careerscp/client_gsk/external1931/gateway.dofunctionName=viewFromLink&jobPostId=359235&localeCode=en-us CBS Procurement,Hub Head of Procurement To lead, ...More

Demand Planner

  • <500 000 Gauteng Operations, Planning & Inventory Permanent Projects / Category Management
https://www.tech-pro.co.za/pages/jobdetail.aspx#!Gauteng/Planning/Demand%20Planner/TP2005490/MSe Category: PlanningPosition Title: Demand PlannerSalary: R600 000 ...More

Head of Procurement

  • <500 000 Gauteng Permanent Procurement Management Procurement Officer / Specialist
https://www.tech-pro.co.za/pages/jobdetail.aspx#!Gauteng/Procurement/Head%20of%20Procurement/TP2005488/ZBuCategory: ProcurementPosition Title: Head of ProcurementSalary: R1.3 million ...More

Warehouse and Distribution Manager

  • <500 000 Gauteng Logistics & Warehousing Permanent Supply Chain
https://www.tech-pro.co.za/pages/jobdetail.aspx#!Gauteng/Logistics/Warehouse%20Distribution%20Manager/TP2005455/TMa Category: Supply ChainPosition Title: Warehouse and Distribution ...More

Supply Chain Manager

  • <500 000 Mpumalanga Permanent Procurement Officer / Specialist Supply Chain
https://www.tech-pro.co.za/pages/jobdetail.aspx#!Mpumalanga/Supply%20Chain/Supply%20Chain%20Manager/TP2005448/LMa Category: Supply ChainPosition Title: Supply Chain Manager ...More

Industrial Engineer

  • <500 000 Gauteng Industrial Engineer Operations, Planning & Inventory Permanent
https://www.tech-pro.co.za/pages/jobdetail.aspx#!Gauteng/Consulting/Continuous%20Improvement%20Manager/TP2005489/SNh Category: ConsultingPosition Title: Industrial EngineerSalary: R900 000 ...More

Operations Manager

  • >500 000 Gauteng Operations, Planning & Inventory Permanent Supply Chain
Our client within the FMCG industry with a ...More

Warehouse and Distribution Manager

  • >500 000 Gauteng Logistics & Warehousing Operations, Planning & Inventory Permanent
An exciting opportunity awaits for a Warehouse and ...More

Demand Planner

  • <500 000 Permanent
Get an opportunity to be part of one ...More