Welcome back to another installment of Whitepaper Wednesday here on the Purchasing Certification Blog.
I must apologize for not producing a Whitepaper Wednesday last week. I was in New Jersey delivering a seminar to a client. A couple of fascinating things came out of that trip and you’ll be reading about them here soon.
Today, I’ll be reviewing a whitepaper entitled “Choosing Spend Categories: Generate More Savings with this Simple Analysis” from K2 Sourcing.
This whitepaper is designed to help procurement departments select which categories of goods and services to select, in which order, when rolling out a strategic sourcing initiative. While spend analysis software is touted as the launching point for strategic sourcing, the whitepaper correctly points out that “Spend analysis in and of itself does not generate cost savings. One must act on the information. Because there is not enough time to work on every spend category simultaneously, it becomes critical to apply resources to the best opportunities. The best opportunities are those that will have the greatest and quickest favorable impact on your organization.”
One of the first recommendations that the whitepaper makes is to assess a category’s potential for savings and time required to source. It includes some well-thought-out criteria that can indicate that a category is “ripe” for savings, such as categories that:
- Are in markets with excess capacity
- That have been purchased from multiple sources
- Haven’t undergone a strategic review in at least two years
- And more
Similar criteria is presented for determining the relative time required to source. The whitepaper closes with a recommended means of prioritizing those categories once the analysis is complete.
Because the whitepaper is short and sweet – only 3 pages – I am going to keep my review of it short and sweet as well. If you’d like your own copy of the whitepaper, you may obtain it from K2 Sourcing’s Web site (registration required).
To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
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