My post earlier this week questioning why more businesses are not capitalizing on today’s highly favorable sourcing markets generated some interesting comments. One supply chain exec suggests that many companies are like “deer in the headlights,” literally frozen by fear. He suggests getting unstuck will require spend management professionals to engage in more tactical strikes to prove that the supply market advantages are for real and to regain their confidence in an increasingly uncertain economy:

“From my perspective we need to talk in terms of tactical, as opposed to strategic, moves to take advantage of immediate opportunities.”

He is not alone in thinking that now’s the time for tactics. At Ariba Spend Management Day in Atlanta last week, H&R Block’s Director of Enterprise Sourcing Operations Gerry Hudson shared his secrets for an effective spend analysis program. (I will share some of his tips in a future post.) He also offered up some actionable tactics you can employ today to get greater yield from every dollar you spend.

Says Gerry: “There are three components to our savings plan: rate negotiations, volume or demand management changes, and buyer decision and product use.”

It is the latter category where Gerry unveiled some simple (some might say obvious) techniques that any company can use today to drive immediate cost savings.

“If having greater visibility into your spend can help you drive additional savings from negotiation leverage, spending money more wisely or not spending it in the first place is an even more direct way to cut costs,” says Gerry. Some examples:

• Change the settings on your printers — such as using the draft setting for internal documents — so as not to consume as much toner.
• Buy toner cartridges from remanufacturers rather than directly from the OEM.
• Enforce use of ground transportation for local shipments rather than more costly overnight shipments. “The dirty secret is that for shorter distances, ground transportation still arrives next day. And it costs a fraction of overnight express delivery.”

I’d add another tactic you can employ right now: leverage the down economy to drive greater adoption of your existing strategic sourcing program and greater compliance of your existing contracts. This is probably the best-ever environment to secure policy support and muscle from Finance and to position your team as part of solution to the budget, cash, and risk challenges of your internal business owners. Gerry and other Spend Management Day presenters noted that they are using greater spend visibility to do just this.

I’m certain a host of other Supply Excellence readers are employing similar demand management and product use methods to curb costs. I encourage you to share your own cost savings techniques in the comment section of this post. In the interim, feel free to dust off the Top Supply Management Tips ebook (download your complimentary copy here), which offers a compilation of the best and most practical cost savings and containment approaches contributed from Supply Excellence readers.