PurchTips - Edition # 271

 

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Managing IT & Complex Category Purchasing

By Charles Dominick, SPSM, SPSM2, SPSM3

Do You Have A Handle On Your Complex Categories?

Certain complex categories like information technology (IT) products present challenges to purchasing professionals like you. In worst-case scenarios, costs are way too high and supplier performance is poor.

Here are three principles to apply to the purchasing of IT or any similar complex category in order to reduce costs and get reliable supplier performance:

  1. Consolidate Products. You need to identify and categorize all products purchased. Which products involve recurring purchases and which are one-time buys? Which products are variations (e.g., different brands) of other products and which are unique? Identify commonly purchased products and work with your internal customers to define standard products to reduce costly and confusing variations.
  2. Consolidate Suppliers. Once you have decided upon standardized products, it should become clear that you don't need to be using all of the dozens, hundreds, or thousands of suppliers you are using. Using proper sourcing practices, reduce the number of suppliers to the minimum you need to provide your consolidated list of items while also having a buffer in your supply base to address the risk of supply disruption.
  3. Consolidate Ordering Methods. Your consolidated list of products and suppliers will grow out of control again unless you streamline the way that products are purchased. The freedom to buy from local stores, web stores, existing suppliers, former suppliers, etc. only will lead to uncoordinated purchasing. Provide your internal customers with a process where the standardized products and contracted suppliers are part of the first and easiest method of their product research.

This article is based on the whitepaper "5 Ways To Manage IT Spend: Overcoming the Challenges of Managing IT Spend for Savings" from our friends at ePlus Systems, Inc. For your own copy of the ePlus whitepaper, please take their survey at http://tinyurl.com/ae6bxcu and you'll be able to download the whitepaper for free right after the survey!

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Are you tired of not getting enough opportunities, respect, and money out of your procurement career? Well, guess what? Nothing will change unless you take action towards becoming a world-class procurement professional.

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Need Better Performance From Your Procurement Team?

Are you a procurement leader whose team isn't achieving the results you know are possible? Maybe it's not enough cost savings. Or frustrating performance from the supply base. Or dissatisfied internal customers.

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