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Today in the US, it’s National Drink Coffee Day. Now I don’t know if that’s an official holiday of any kind or just another internet meme, similar to Talk Like a Pirate Day (September 19th). But the ‘holiday’ reminded me of a recent discussion thread on Ariba Exchange about sourcing coffee, which dug into strategy for what the original poster described as a ’small, but sexy category’.
So, my question to all of you in the sourcing/procurement trenches is this … how do you approach these ’sexy’ categories? Does their appeal as a catchy, high profile case study help you expand spend under management if you can provide a quick win? And what categories in this vein have you tackled effectively?
Justin Fogarty is Managing Editor of Supply Excellence and community manager of Ariba Exchange. For any questions or feedback on the blog or its contributors, Justin can be reached at jfogarty[at]ariba.com.
4 responses so far ↓
1 Thomas Holzapfel // Sep 30, 2010 at 2:53 am
Coffee as a “sexy” category? I think it’s probably one one of the categories where one can only lose.
Coffee is a highly emotional topic. Alternatively: Which soft drinks are available in vending machines or meeting rooms. Personal tastes will be a key factor why employees who haven’t be involved in the evaluating (tasting) process will be unhappy and if this reaches the right level in your organisation, all your efforts might be revoked in a minute, and your credibility disappears.
There are a few categories that may look sexy at first glance, but become really challenging once you begin to dig a bit deeper. Travel is a classic, cell phone contracts are great, too (hey, can you check with the carrier to see if the can provide better coverage on my way to work/on my golf course/in my cubicle?)
2 Chris Toft // Oct 1, 2010 at 8:59 am
One of the most fascinating categories I’ve happened upon is this: Strategic sourcing of agricultural materials, botanicals and the flavors/ derived from them.
You intersect with an incredible array of processes and cultures.
The stories can really brighten the room during an otherwise boring direct materials supply chain review.
But ensuring an uninterrupted, high quality, socially compliant supply of these crop-based materials requires deep technical and commercial category knowledge. Risk mitigation plans should be particularly well-developed. Inventory and spend need to be managed with flexibility.
An extensive relationship network for soft data collection is one of the most valuable activities behind the scenes, too. .
The storytelling part is fun.
The game is serious. The ability to produce your company’s Brand is at stake.
Quick win isn’t even in the vocabulary.
3 Steve Hall // Oct 22, 2010 at 9:09 pm
Hi Justin, I was talking with a CPO yesterday on this and he was saying that coffee wasn’t just an interesting area - at the moment, with the volatile prices in the market, his team’s work in previous months to lock down prices was really paying back - making a huge difference when you think about what the impact might have been on the company’s margins.
I think that speaks to what Chris was saying - it might be small and sexy, but market conditions can turn that perception on its head…
4 Justin Fogarty // Oct 23, 2010 at 3:10 am
@Thomas, no doubt about the pitfalls around emotional categories. But with potential costs savings and efficiencies on the line, we’ll see companies going after them regardless of the blowback from employees. Personally, I liked that we did a coffee tasting at Ariba before switching the breakroom java. Now, if we’d just source 1/2 & 1/2…
@Chris - Sounds like you’ve got some great stories about very interesting projects! Love to have you share as guest post sometime if you’re interested.
@Steve - Thanks for sharing. I know with the price moving so drastically and the MASSIVE amounts some companies must source, coffee can really be a big source of savings. And telling the story to the c-suite must turn some heads!
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