There are many different ways of approaching a procurement exercise. One way is to conduct a Procurement Opportunity Analysis. You can use the tools in different stages such as Strategic Sourcing.
- What is the demand
- What is the supply opportunities
- What is the total cost
- What are the risk
Consider the quick wins
Opportunities might include rapid implementation- what can you change that has a positive effect in 90 days
- What opportunities take longer for fruition say 6 to 12 months?
- What can be changed easily without too much effort?
- What can be done medium to long term to support strategic plans
- Procurement Opportunity Analysis:
- Implementation timescales
- Matrix resourcing
- Technology investment
- Acceptability to the customer
- Business change management load
- Supplier ability to meet demand
- Available skills and knowledge
- Risk assessment
- Senior Sponsor
| Opportunity | |||
| Description & Scope | |||
| Implementation | Time | Resources | Benefits |
| Mini Risk Log | |||
| Description | Probability X Impact | Mitigation | Next Steps & Recommendations |
| Category / Sub-Category | Spend PA (£) | TCV £ | Price and Source Flexibility H= High M= Med L= Low | Savings (%) | Potential Savings PA (£) | Stakeholders / Departments | Prioritisation H= High M= Med L= Low | |||
| Business Impact | Ease of Implementation | Priority | ||||||||
| Internal Complexity | External Market | |||||||||
There might be opportunities in tactical sourcing , reducing the long tail getting sharper on obtaining 3 quotes, levering the P2P team. Reviewing sustainability options, strategic sourcing, contract management, category management. The list is endless. Reviewing opportunities is just the start of the process it might lead you onto other aspects of the procurement cradle to grave process but its the initial spark of ideas that will help you navigate your options.
Other tools for procurement opportunity analysis include Kraljic Porters Fiver Forces or try Market Analysis
Opportunity analysis- what are you spending your money on, has the spend buckets been profiled and if so how, after gathering data work with stakeholders to influence them on why opportunities need to be leveraged with commercial support. More information on Procurement Opportunity Analysis
Final re-cap
- Analyse the category of data, this can be cut by supplier, directorate, spend using pareto or long tail, use finance data such as PO spend, committed and whole PO value
- Look for opportunities to leverage and synchronise, rationalisation
- Sort into HML complexity, quick wins, potential for savings, ease of carrying out analysis, implementation
- Write up your sourcing strategy
- Share with key stakeholders
