MANAGING INDIRECT SPEND
Enhancing Profitability Through Strategic Sourcing
"We pay how much?!"
The story is the same at most companies. CEOs, CFOs, and other executives finally decide that it′s time to take a closer look at what they pay for the goods and services required to keep their businesses running. It could be office, telecommunications, insurance, or marketing materials. Indirect spend spending not directly tied to the creation of a finished product or service can make up 40 percent or more of an organization′s total expenses.
Providing tools to help drive savings as well as a step–by–step presentation of the strategic sourcing process, Managing Indirect Spend provides you with the knowledge and necessary tools to successfully reduce costs in the area of indirect spend. Based on the authors′ more than 20 years of consulting experience, the processes and real–world examples presented in this book illustrate how to successfully implement cost reduction strategies for clients of all sizes, in just about every industry and in hundreds of spend categories.
Featuring contributions by notable sourcing professionals, Managing Indirect Spend offers in–depth discussion of:
- Data collection and analysis
- The best–kept secrets of procurement tools
- Little–known free technologies that help you source more effectively
- Scorecarding suppliers
- What not to do during a strategic sourcing initiative
- Office supplies and the sourcing process
- How cell–phone management drives continuous cost savings
Moving away from the status quo can be difficult, but it is not impossible. From controlling administrative costs to managing expenses for facilities, finance, marketing, and IT, Managing Indirect Spend shows you how effectively managing indirect costs can make a huge impact on bottom–line growth. Discover ways to cut corporate costs without reducing headcount with the proven guidance found in Managing Indirect Spend.
Introduction: What Is Indirect Spend, and How Does One Manage It? 1
PART ONE: THE PROCESS
Chapter 1: An Introduction to Strategic Sourcing 9Joe Payne
Chapter 2: Data Collection and Analysis 15Joe Payne
Chapter 3: Conducting Research 47Joe Payne
Chapter 4: The RFx Process 63Kathleen Daly
Chapter 5: Scorecarding Suppliers 89Kathleen Daly
Chapter 6: Negotiations 103Joe Payne
Chapter 7: Get It in Writing 121Joe Payne
Chapter 8: Implementation and Continuous Improvement 145Joe Payne
Chapter 9: What Not to Do During a Strategic Sourcing Initiative 167William Dorn
PART TWO: THE TOOLS
Chapter 10: The Importance of Market Intelligence 191William Dorn
Chapter 11: Tools to Assist You in Gathering Data and Expediting the Sourcing Process 207William Dorn
Chapter 12: Increasing Stakeholder Engagement 231David Pastore
PART THREE: EXAMPLES FROM THE FIELD
Chapter 13: Supplier Collaboration 245William Dorn
Chapter 14: Leveraging Supplier Feedback 255William Dorn
Chapter 15: Data Analysis 263David Pastore
PART FOUR: HOW TO DO IT
Chapter 16: Offi ce Supplies and the Sourcing Process 277Jennifer Ulrich
Chapter 17: Negotiating Local and Long–Distance Telecommunications Services 299David Pastore
Chapter 18: How Cell–Phone Management Drives Continuous Cost Savings 315William Dorn
Chapter 19: Getting the Best Small Package Rates 339William Dorn
Chapter 20: Making Sense of MRO Spend 355Kathleen Daly
Chapter 21: Analyzing Shipping Costs 381Joe Payne
Chapter 22: Sourcing Services 401Jennifer Ulrich and Scott Decker
About the Authors 423
About the Contributors 425
JOE PAYNE, Director of Strategic Sourcing, Source One Management Services, is an experienced consultant who has helped many companies reduce costs and manage change. He leads a team of project managers and analysts, developing insights into the challenges organizations face when undertaking initiatives to reduce costs in the area of indirect spend.
WILLIAM R. DORN, JR., Director of Operations, Source One Management Services, is a certified Six Sigma Black Belt with extensive experience in large–scale projects for Fortune 500 companies and the federal government. His expertise includes business analysis; mechanical and manufacturing engineering; business process reengineering; risk analysis; and technology design, acquisition, and implementation.