Supply Excellence — Supplier Site Visits Part #3: Post Analysis

Supplier Site Visits Part #3: Post Analysis

August 5th, 2008 · by Deitra Curry · No Comments · best practices, contract management, supplier management, supply management

You did your Prework before going onsite and then had an enlightening, informative supplier site visit. Now what? Clearly you gained some insights into cost drivers, potential process efficiencies and even personalities. But a lack of follow through at this stage in the game could make all that hard work for naught.

The “Post Analysis” phase is key to taking what you’ve learned and leveraging it into improved supplier relations, better quality inputs, or perhaps most importantly, lasting cost savings.

How do you turn your newfound knowledge and good intentions into action?

Identify Cost Savings - During the prework and site visit phases, did areas where your supplier may be padding too much fat into their margins come up? Did your discussions and frank questions about efficiency identify anything the supplier could do to drive down costs and allow them to pass the savings on to you? If so, now is the time to pursue those opportunities further to determine next steps, time frames and potential savings.
Needs vs Wants - Often times when you scratch below the surface, you realize that some of the incremental costs your company incurs are simply not worth their added expense. For example, many companies require a 24 hour help center from their suppliers, but fail to utilize that level of service. If you cut that back to 12 or 16 hour availability, will your business really suffer? Measuring the ROI of the various components in your supplier’s products and services will help you trim unnecessary spend.
Maintain Quality - At the end of the day, you need to make sure your newly identified efficiencies and cost cutting measures don’t drag down the quality of the goods and services your supplier provides. If you get to the point where quality suffers, you risk the company’s reputation, customer loyalty and supplier relationship. Chances are, that damage far outweighs any potential savings you may have gained.

Deitra Curry is a Senior Sourcing Consultant in Ariba’s Spend Management Services group. Ariba Services Category Manager Justin Falgione contributed to the research and analysis in this post.

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