The procurement professional is an essential element of success for many companies around the world. Not only are they responsible for managing at least some of the company’s corporate spend, but they are also instrumental in discovering new suppliers, developing relationships with suppliers, and keeping their company’s supply chain profitable and healthy.
Guest writing for industry publication Spendmatters, Jeff Gilkerson, manager of The Hackett Group, contends adoption of esourcing tools throughout the manufacturing industry is anemic, despite the very real and tangible benefits showcased by numerous organizations throughout the sector, including General Electric, Nasa, SpaceX, and General Motors.
Gilkerson believes the paradox permeates the industry because most organizations lack a standardized sourcing methodology. What’s more, many organizations are inherently averse to change. Especially in the sourcing department.
“Think of moving,” Gilkerson says. “Despite it maybe being a move to [a] nicer house in a better neighborhood, the process of packing, moving, and unpacking is difficult and not something most people look forward to. Similarly, moving from a manual sourcing process to an esourcing process requires change on the part of users.”
Change is difficult. But it needn’t be.
For many procurement professionals, esourcing is something both invigorating and daunting, a process overflowing with potential. But it's one typically organizationally stigmatized and crippled by complexity and/or corporate politics. Gilkerson looks at 4 ways procurement professionals and executives can mitigate both risk and corporate aversion to fully implement an effective esourcing solution, such as when sourcing manufacturers on MFG.com.
(And make sure to stayed tuned til’ the end, where we examine what we think is the #1 Reason esourcing Tools Typically Aren’t Adopted Within Procurement Organizations).
Standardize The Sourcing Process Across Your Organization
Ensure there is only one sourcing process for the organization and that it is consistently and broadly followed.
Normally, esourcing providers leave the end users outside the meeting room when developing their platform. As a result, tools often fail to deliver the ease-of-use that cultivates high user adoption and organizational efficiency. Including end-users in development is key.
Savvy esourcing tools make it easy for companies to not only switch from their current process to a new one, but to also “consistently and broadly” implement said system into multiple divisions.
At MFG.com, we believe knowing exactly what users want – and how to get it to them – is a paradigm for success across industries, products, and services.
Develop -- and Take Advantage Of -- Comprehensive Esourcing Training
Esourcing tools have become significantly easier to use, but for most users it is still change. A comprehensive training should be three-pronged. (1) Basic Functionality, (2) Best Practices, and (3) Hands on.
Not overwhelming users is vital to early and continued implementation of esourcing tools. Developing, applying, and disseminating easy-to-understand training documents, as well as cultivating easy-to-digest “pilot training,” goes a long way in helping dissolve the barrier to entry inherent in all esourcing tools.
What’s more, having a seasoned expert support team – such as MFG.com Buyer Support – helps users throughout the entire process, from implementation to award and product receipt. Imagine having a dedicated team of sourcing professionals at your fingertips – for free. The benefits become obvious.
That’s how tools like MFG.com drastically lower the barrier to entry and integration with a business’ current sourcing solution. Having ready access to expert sourcing advice, best practices, and sourcing education for an entire organization is of priceless value.
Even the savviest of users will get confused with the implemented system from time to time. It doesn’t matter what system they’re using. In our digital age, it is no longer a question of if in-depth training material is needed, but a question of when and how it’s presented and applied.
Track the Use -- and Results -- of Your Esourcing Tool
In addition to tracking and reporting the results (i.e. savings) from esourcing widely across the company, it’s just as important to continuously track and report to the procurement organization on the use and adoption of the tool.”
Gilkerson’s right: The esourcing platforms that provide the greatest value also provide the greatest transparency. And that visibility isn’t relegated to just the procurement professional. Instead, it transfers to any and every user across an organization.
Esourcing platforms like MFG.com provide users a depth and breadth of visibility across supply chains – however large or small – that is often impossible to attain across multiple, disparate systems.
Imagine the typical sourcing process.
You manually submit RFQs through one portal, sign NDAs through another, and communicate with numerous vendors through 2, 3, or 4 disconnected communications channels. It sounds like a headache – and it often is.
Keeping up with payment terms, production and pricing agreements, part counts, delivery dates, and other essential sourcing communications through a disjointed, manual sourcing system just isn’t feasible in manufacturing today.
Good esourcing solutions focus on convenience. They allow for streamlined supplier discovery and evaluation. For documented and secure transactions. And for unencumbered communication between both team members and buyers and manufacturers.
But Our #1 Reason Esourcing Tools Typically Aren’t Adopted Within Procurement Organizations -- Incumbent Suppliers
Gilkerson makes some great points, but ultimately, he omits the primary question plaguing procurement organizations trying to implement esourcing tools today: Can I bring my incumbent suppliers into the system?
For the procurement professional, it’s an essential question because changing suppliers is risky. And bringing your current suppliers with you isn’t.
But what about when you need to challenge your incumbents? When you need to discover new suppliers for current or new parts and products? Or when you need to lower costs and penetrate new verticals?
Finding new suppliers often isn’t as easy as it sounds, especially if you’re relying on traditional manufacturers directories or communications channels like email.
Traditional manufacturers directories just aren’t efficient in today’s manufacturing world. Searching for quality manufacturers often becomes a protracted, seemingly endless string of emails and phone calls, most of which produce very minimal results – if any.
At the end of the day, it takes a lot of research to get it right. A lot of research you may not have the time to do yourself.
That’s where a tool like MFG.com comes in handy.
Not only can you invite your incumbent suppliers to join MFG.com, you can also quickly source new suppliers without hours of research. Post your RFQ to our 100% free – and secure – manufacturing marketplace, and quality suppliers of custom manufactured parts will come to you. Not the other way around.
Whether you need a new supplier for a current product, a future product, or even for replacement parts to keep your machines running, using MFG.com mitigates supplier risk.
More than 25% of manufacturers in our marketplace are certified. And many are rated by other MFG.com buyers, allowing unprecedented visibility into past behavior, such as quality, responsiveness, and delivery – making your decisions easier, and more efficient.
With so much emphasis placed on efficient sourcing in manufacturing today, it’s baffling so few esourcing providers adequately empower the procurement teams that so desperately need them. 2016 is the year to turn things around.
Will esourcing providers pay attention?