Short-term, tactical spending by companies can be more effective than longer-term strategic approaches, say procurement consultants Efficio.
In the latest Viewpoint article from Efficio, Senior Consultant Julien Bitton says organisations sometimes see strategic sourcing as the only or the best method to buy the goods and services they need.
The Viewpoint, Why tactical is sometimes better than strategic, says strategic sourcing approaches are often best in high-spend areas or when no other time-critical activities are taking place.
But they involve investing a great deal of time and resources in researching the market to ensure the best suppliers are selected.
The strategic approach must be evaluated in terms of the time and effort required to realise any benefits, according to Efficio. Other less time-consuming approaches may be more appropriate for the "tail of the spend" or for time-critical activities, allowing the procurement function to drive smaller, tactical wins that deliver potential benefits quickly.
Bitton says: "Tactical sourcing is reactive to a situation or need and worked on an individual transaction basis. It is much more of an isolated decision and works towards ensuring the organisation has the right products at the right time.
"This simple process is often a solution for less critical spend as it allows the procurement function to drive smaller, tactical wins that deliver potential benefits quickly.
"Tactical negotiations, whether face-to-face or using tools such as e-auctions, can be useful for projects that need urgent delivery, such as capital projects whereby additional value will be extracted by creating a competitive environment instead of awarding the work to the incumbent directly."
It is also essential that tactical procurement projects are managed properly to avoid damaging relationships with suppliers.
Bitton concludes: "It is imperative that any tactical procurement project is managed effectively. To a great extent this is down to expert negotiating skills. However, formal guidelines must also be in place that clearly show when and how tactical sourcing should be used.
"Procurement professionals should, of course, bear in mind that they have a right - a responsibility, in fact - to involve competition in any sourcing process. Using a well-managed short-term tactical approach may often be the most cost-effective way to make the most of limited procurement resources and deliver good value quickly."
Notes to editors
Why tactical is sometimes better than strategic can be downloaded from: http://www.efficioconsulting.com/_uploads/documents/view-poi...
Efficio is a results-focused procurement consultancy with a track record of helping leading organisations achieve more value from their procurement. It is headquartered in London, UK, and has offices in Denmark, France, Germany, Switzerland and the US.
Efficio combines the credentials of a top tier firm with the depth of expertise of a flexible niche player. Clients include 3i, AstraZeneca, Barclays, BAT, Biffa, British Gas, Ford, Scandic, HSBC, KKR, Nokia, National Grid, O2, Tryg and Thames Water among others.
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