How can sourcing professionals improve their decision-making?

Typically, the detailed Request for Proposal (RFP) process kicks off 3-4 months before the contract concludes. The initial step involves a discussion with the internal requestor to assess our current position. Are we content with the current supplier/contractor's service level? How are our relationships? What improvements are necessary? Given our longstanding partnership, we need a vision for the future. Our strategy will hinge on this internal analysis. Do we want to change the current provider/supplier? If not, perhaps refining specifications or standardizing them and subsequently enhancing cost structures is in order. Alternatively, should we focus on elevating the level of service? Or probably we would like to extend the scope?

For proper decision making you have to do proper background study. Communication Products study Costing Negotiations RM tracking Marketing trends analysis

- Entender a real necessidade do cliente. - Vis?o de negócio: quais impactos existem nas diversas áreas e stakeholders envolvidos. Afinal, os ganhos indiretos podem ser t?o importantes quanto os diretos.

By focusing on these areas, sourcing professionals can make more strategic, efficient, and risk-aware decisions. 1.Data-Driven Analysis: Utilizing data analytics to understand market trends, supplier performance, and cost drivers. This helps in making informed decisions based on empirical evidence. 2.Supplier Relationship Management: Building strong relationships with suppliers can lead to better negotiation outcomes, improved quality 3.Risk Management: Identifying and mitigating risks in the supply chain proactively. 3.Technology Adoption: using technology like AI, machine learning, and blockchain for better transparency, efficiency, and predictive analysis 5.Continuous Learning 6.Stakeholder Engagement 7. Negotiation Skills

There is no pill information or tool for this, however let me try to elaborate as the following; * Define the expectations of your brand, organization etc., from a source and the capabilities of the vendors in your portfolio * Clarification of the metrics and critieria (such as innovation, technical capabilities, design, logistics, technology, service etc.) that you will evaluate the vendor. This may vary whether you make a quick scan to filter your sources, or to make a thourough evalution. * Sustainability masures of your vendor; this could on one side be the certificates they hold, accreditations,more importantly the intimacy while creating a better tomorrow basing on the triple transformation which stand for digital,green and social.

Here are my view... - Know the scope... a well defined scope of work would always help in better decision making - Decide on the scorecard - Decide on the criteria, weightage and who can score - Know the market... what is the benchmark rates... what are the industry standards and best practice - Last particularly when in negotiation always know your BATNA and ZOPA

1)Data investigation: Data collection, analysis and classification. 2) Prioritize information based on analyzed data-Catalogue importance and risk level. 3) Find source and potential solution to the problem.

Establishing a solid problem definition is foundational. Once defined, the next critical step is information gathering for informed decision-making. Seeking details about the product or service to be sourced spans various sources, including market research and supplier data. However, meticulous attention is essential to validate the quality and reliability of the gathered information. In today's information-rich environment, sifting through details is necessary to ensure accuracy. Rigorous cross-checking becomes paramount, especially concerning product quality and supplier reliability—cornerstones influencing the subsequent decision-making process.

Efectivamente, la información es poder y debemos utilizarla de la mejor forma para resolver el problema. Para ello, el solicitante debe transmitirnos de forma clara y concisa sus necesidades.

Following problem definition, information gathering becomes crucial for informed decision-making. Utilize diverse sources—market research, supplier data, stakeholder input, industry benchmarks, and best practices—to gather insights. Assess the quality and reliability of data, mindful of validity. Avoid information overload by focusing on pertinent details, preventing confusion, and ensuring a balanced and informed sourcing decision-making process.

A globalized world is a world of alternative suppliers. If you don’t have a plan B 99% sure you are not buying right. Challenging with alternatives validates the value of your choice.

Firstly, encourage team collaboration to generate a wide array of potential alternatives by leveraging the collective expertise. Secondly, utilize various analytical tools and methodologies to assess and evaluate the feasibility, cost-effectiveness, and risk associated with each alternative. Thirdly, consider seeking input from external stakeholders or industry experts to gather fresh perspectives. Fourthly, prioritize and rank the generated alternatives based on predefined criteria or key performance indicators (KPIs). Finally, continuously refine and iterate the alternatives, allowing for flexibility and adaptability in decision-making processes.

Following information collection, the crux lies in crafting alternatives for the identified problem. In our interconnected landscape, options abound, but discerning the best course is deceptively intricate. Essential to this is supplier diversification, weighing factors like price, location, quality, lead time, delivery specifics, and supplier engagement. Implementing a scoring system based on these parameters is crucial. This thorough evaluation ensures optimal choices, aligning with the best prices, top-tier quality, and punctual deliveries—effectively streamlining our operational workflow.

This stage is crucial for proper strategic focus. It primarily focuses on reducing supplier risk potential through the informed (*) listing and early-stage qualification of alternatives. It is a matter of business continuity to ensure you not only provide many lanes to the same routes but also many different routes altogether (solutioning). (*) there's always an alternative but you're not always aware of them.

Con toda la información del problema, ya de forma clara, buscamos la solución que nos permita cumplir la necesidad en el plazo indicado.

Sourcing professionals have various options to improve decision-making when evaluating alternatives. These include defining clear evaluation criteria aligned with sourcing objectives, utilizing both quantitative and qualitative analyses to assess options comprehensively, employing decision matrices or scoring models to rank alternatives based on predefined criteria, and implementing pilot tests or trials to observe real-world performance before final decisions. By leveraging these methods, professionals can systematically evaluate and compare alternatives, leading to more informed and strategic sourcing decisions

Post-alternative generation, evaluation against set goals, criteria, and constraints is imperative. Utilize decision matrices, scoring models, cost-benefit or multi-criteria analyses to assess alternatives. Compare and rank them based on expected value, impact, and suitability. Account for trade-offs, uncertainties, and underlying assumptions inherent in each alternative, enabling a comprehensive understanding of their viability and facilitating informed decision-making in the sourcing process.

Nobody wins money on a single buy. All the costs of adjusting both sides and understanding the business mechanics between two companies can only provide significant profits on the mid long term. Aim for the partnership not just to the deal.

Nobody wins money on a single buy. All the costs of adjusting both sides and understanding the business mechanics between two companies can only provide significant profits on the mid long term. Aim for the partnership not just to the deal.

Decisions do not die the day they are made but are like a potted flower that was just transferred from somewhere else. Now is where the real work starts: monitor how realistically your objectives have been met with metrics and analytical data. Your numbers should be accessible to the less-procurement savvy and need to be well onto the general applied business principles of wherever you currently delve. While being objective, they have to adapt to the language and constraints of your business and should basically answer the following question: How well did things go, compared to where we expected them to go? If not, how do we calibrate it?

Sourcing or Embarking on the Purchase of any category is almost 95% standardized already through 7-step/9-step sourcing process. Procurement professionals can easily complete the project following these process steps while adding that remaining 5% category specific flavors. To me, the most important parts in taking sourcing related decisions are the following two- 1. Devote adequate time in preparations and planning even before kicking off the project. It involves a thorough project (risk) assessment including adequacy of specifications, establishing primary sourcing goals, supply market research and more. 2. Research, research and research at every step to know the market scenario and adopt the correct strategy to accordingly follow

It’s always a good idea to perform a root cause analysis. Very often the problem being presented is in fact merely a symptom of an underlying more significant problem. The solution proposed therefore is merely a temporary bandaid and a missed opportunity disguised as a fix. By the time Procurement is approached the solution may already be baked. Get in the habit of asking “what is the problem we’re meant to solve and is that the problem we’re solving with our current strategy?” This will allow Procurement to solve strategic business concerns rather than tactical purchasing problems. It will make Procurement a thought-leader rather than an afterthought.

While making purchasing decisions, it is crucial to consider the current scenario, along with the pros and cons that influence the decision. In our dynamic environment, decisions made today may face challenges tomorrow. Buyers should base their decisions on the following factors: ?Current Situations: Consider the user’s requirements, urgencies, and global challenges. Ensure that the current situation aligns with reality. ?Assumptions: Recognize that assumptions play a role in decision-making. ?Impact Assessment: Evaluate the potential impact if assumptions change or scenarios shift. After making a decision, buyers should assess its performance and document their learnings. This process contributes to improving decision-making in the future.

It’s certainly undefinable, but people skills and judgement are still a large part of any supplier engagement. Solid data prepares you for any sourcing exercise, and I’d never engage a supplier without knowing what the data suggests should be the outcome. However, the “soft” skill of knowing when to push, realizing when you’re being lied to, and knowing when the deal is as good as it’s going to get are traits of any highly successful Procurement professional. Data and People Skills go together like peas and carrots…

Live today challenges, looking and forecasting what might be the future ones, and very important keep very near what happened in the past. Clean sheet approaches to sourcing are half way to repeated mistakes.