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Managing corporate spend is far more complex than conducting RFPs. Learn how the most efficient and effective procurement departments operate, control costs, enforce compliance, and manage indirect spend.
Managing Indirect Spend provides executives and procurement professionals with the knowledge and tools necessary to successfully reduce costs with a strong focus on the often-overlooked area of indirect spend. It also offers great value to those procurement and purchasing professionals aspiring to be leaders in the profession, regardless of the spend they manage. It includes an overview of the challenges faced when sourcing indirect spend categories, a detailed dive into the strategic sourcing process, tools that can help drive savings, technologies that drive efficiencies and compliance, and examples of success based on real-world experience. It is a how-to guide that clearly covers sourcing engagements of any complexity and provides the details needed to source effectively. The book is structured into sections covering the sourcing and procurement process, the tools and technologies, examples from the field, walkthroughs of specific sourcing engagements, guidance on building an effective sourcing team, and the information needed to become a best-in-class sourcing organization.
Since the initial publication of this book, the procurement profession and the discipline of Strategic Sourcing have matured. Markets have changed, processes developed, trends have come and gone, and technology has experienced leaps and bounds, posing new and interesting challenges for procurement professionals. In addition to covering tried-and-true practices for strategic sourcing, this Second Edition discusses how strategic sourcing has evolved and provides an update on the techniques, tools, and resources available to purchasing groups. This book:
With tools, real-world examples, and practical strategies, Managing Indirect Spend provides insider guidance for big bottom-line growth through effective management of indirect costs.
JOE PAYNE is an industry-recognized expert in supply chain and procurement best practices. He specializes in increasing the value of procurement via innovative solutions and oversees delivery of both services and technology to help companies improve their procurement, supply chain, and financial processes.
WILLIAM R. DORN is an operations, procurement, and product management leader. He is a process improvement and technology expert specializing in business transformation.
DAVID PASTORE is a strategic sourcing expert and procurement thought leader. He specializes in enterprise-wide spend management and cost reduction programs.
JENNIFER ULRICH is an industry-wide authority on procurement, finance, digital transformation, and category management, focused on elevating the role of procurement through enhanced business processes.
Introduction
Part One: The Process
Chapter One: An Introduction to Strategic Sourcing X
Visibility X
Objectivity X
Project Management Tool X
In Summary X
Chapter Two: Data Collection and Spend Analysis X
What Is Data Collection? X
Where to Start? X
Dealing with Decentralized Data Sets X
Spend Analysis X
Spend Analysis Tools X
Kicking Off the Projects X
End-User Interviews X
Line-Item Detail and Getting the Most from Your Supply Base X
Supplier Interviews X
Analyzing Contracts and Pricing Agreements X
The Final Analysis: Building a Baseline X
Chapter Three: Conducting Research X
Types of Cost-Savings Opportunities X
Understanding the Category X
Identifying Suppliers X
Understanding the Supply Chain X
Understanding Current Market Conditions X
Understanding the Factors of Cost X
Review of Technologies, Processes, Products, and Services X
Collecting Market Intelligence Through the RFI Process X
Chapter Four: The RFX Process X
Using the RFI to Begin the Sourcing Phase X
Developing Your Sourcing Strategy X
Going to Market X
Generating the RFP and RFQ X
Supplier Selection and Scorecard Criteria X
Administering the RFX Process X
Reverse Auctions X
Alternatives to the RFX-The Importance of Flexibility and Creativity in the Sourcing Process XX
In Summary
Chapter Five: Scorecarding Suppliers X
Measuring Value: Developing Selection Criteria X
The Quantitative Analysis: Evaluating the Bid Portion of Supplier Proposals X
The Qualitative Approach: Developing the RFP Matrix X
References X
Teamwork and Objectivity X
Technology's Role X
Chapter Six: Negotiations X
Knowing What to Negotiate X
Negotiation Optimization: Developing Final Targets X
Getting to "No" XX
What Not to Do XX
In Summary XX
Chapter Seven: Get It in Writing X
The Contracting Phase X
Essential Components of a Contract X
Attachments XX
Contract Management XX
Making the Best Use of Your Legal Team XX
Contracting Pitfalls and Language to Avoid XX
Working Outside of a Contract: Pricing Agreements and Handshakes XX
Chapter Eight: Implementation and Continuous Improvement X
The Challenges of Implementation X
Overcoming Challenges X
Monitoring Improvements After Implementation X
Savings and Compliance Best Practices XX
Continuous Improvement Initiatives XX
Chapter Nine: What Not to Do During a Strategic Sourcing Initiative X
Creating Overly Complex or Long RFPs X
Letting the Supplier Write the RFP for You X
RFP Spam X
Part Two: The Tools
Chapter Ten: The Importance of Market Intelligence X
The Types of Market Intelligence X
Components of Success X
Breaking Down the Components XX
Chapter Eleven: Introduction to Procurement Technology X
A Brief History of Procurement Technology X
The Solution Landscape X
Upstream and Downstream Procurement X
Sourcing X
Reverse Auctions XX
Contract Lifecycle Management (CLM) XX
Supplier Information Management (SIM) XX
Supplier Performance Management (SPM) XX
Supplier Risk Management (SRM) XX
Procurement (PXP) XX
Invoicing and Payment XX
SXP Individual Products Versus Full-Suite Solutions XX
Chapter Twelve: Increasing Stakeholder and Supplier Engagement X
What Is a Stakeholder? X
Who Are the Stakeholders? X
The Value Brought by Stakeholders X
Chapter Thirteen: Leveraging Group Purchasing Organizations X
Types of GPOs X
Services Provided by GPOs X
Benefits of GPOs X
GPO Disadvantages X
Best Practices for Managing GPO Relationships XX
Summary XX
Part Three: Examples from the Field
Chapter Fourteen: Supplier Collaboration X
Opening Up Your Requirements X
Giving Suppliers What They Need X
Helping Suppliers With Their Supply Chain X
Collaborating With Suppliers in Similar Industries X
Chapter Fifteen: Leveraging Supplier Feedback X
Avoiding the RFP Process X
Making Yourself the Ideal Customer X
Examples of Leveraging Supplier Feedback Successfully X
Chapter Sixteen: Opportunity Assessment and Sourcing Roadmap X
Introduction X
Starting with Spend Analysis X
Procurement Taxonomy X
Opportunity Assessment X
Roadmap XX
Part Four: How to Do It-Sourcing
Chapter Seventeen: Determining Project Complexity X
Complexity Drivers X
Chapter Eighteen: Planning and Optimizing Low-complexity Projects X
Getting Familiar with Low Complexity X
Where to Find Low Complexity Projects X
Dealing with Unexpected Complexity X
Adding Complexity with Purpose X
Factoring Low-complexity Projects into Your Roadmap X
Chapter Nineteen: Navigating High-Complexity Projects X
Process Drivers X
Project Drivers XX
Part Five: How to Do It-Building and Managing an Indirect Procurement Team
Chapter Twenty: Building an Indirect Procurement Team X
Defining the Role of Procurement X
Designing the Framework X
Building the Team XX
Chapter Twenty-One: Team Training and Development X
Where to Begin X
Balancing the Content X
How to Make It Stick X
Chapter Twenty-Two: Process, Policy, and Digitalization X
Enacting the Change X
The Role of Governance X
Enabling the Team through Technology X
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