What is the secret sauce to complex sourcing?

Navigating the complexities of strategic sourcing often feels like a choice between the manual tedium of spreadsheets and the under-utilized potential of sourcing tools. But what if there was a perfect blend of ingredients to create the ultimate procurement solution?

In a recent webinar, Dylan Alperin, our resident procurement maestro and VP of Professional Services, shared the “secret sauce” for mastering complex sourcing, combining the best tools and techniques to revolutionize your strategy:

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Spreadsheets: the manual minefield

Excel might be your old reliable, but let’s face it: you deserve better. “Excel is like that trusty Swiss Army knife,” Dylan says, “great for everything until you need to handle a million records or more.” And let’s be honest, who hasn’t found themselves lost in a maze of pivot tables and VLOOKUPs, wondering if there’s more to life?

Spreadsheets, while widely used, are incredibly manual. They are prone to human error and can be painstakingly difficult and time-consuming to analyze. As Dylan notes, “It's almost like no good deed goes unpunished. You think you’ll only hard code something once, but something changes, and you end up doing it over and over again.”

Legacy sourcing tools: the dust gatherers

‍On the other hand, many sourcing tools end up as dust gatherers. These systems might have been revolutionary back in the day, but now they’re more like a ball and chain, dragging down your efficiency and innovation. They are either too difficult to use or require experts to operate. This often leads to low adoption rates and missed opportunities for efficiency and savings.

‍Dylan likens these outdated systems to “living in a cave, only seeing shadows on the wall and thinking that’s all there is.”

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The key ingredients of the sourcing secret sauce

So, what are the essential ingredients for successful complex sourcing? Dylan breaks it down:

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Supplier information

‍Modern sourcing tools need to handle vast amounts of data and complex variables effortlessly. “You can run 5, 10, 50 scenarios and quickly compare across them all,” Dylan explains. “The system does all the work, so you don't have to spend months analyzing data.”

“The system does all the work, so you don't have to spend months analyzing data”

Volume discounts

‍A centralized system for storing and managing procurement data is crucial. This allows for easy benchmarking, tracking market shifts, and efficient auditing processes. “Being able to track and manage all that data for you, for everybody on your team—if somebody's on vacation or out for the weekend—that's a huge win,” Dylan emphasizes.

Package offers

‍Usability is paramount. Tools like Keelvar are designed to be user-friendly, enabling quick setup and management of RFPs. “I've got customers who told me it used to take them four days to build their bid in other legacy sourcing optimization tools, and only took them four hours in Keelvar,” Dylan shares.

Different contracts

‍Effective supplier engagement is critical. Providing real-time feedback to suppliers during the bidding process ensures they can adjust their proposals to better meet the procurement team’s needs. This transparency results in higher quality bids and more competitive pricing. “This isn't about beating suppliers up over price,” Dylan explains. “It’s about discovering those alternate proposals that incentivize suppliers to provide better pricing.”

“It’s about discovering those alternate proposals that incentivize suppliers to provide better pricing”

Different payment terms

‍Advanced sourcing tools must integrate seamlessly with existing ERP and P2P systems. Flexibility in handling various categories and adapting to specific organizational needs is essential for a smooth procurement process. “Keelvar can handle any category—peanuts, orbital, truckload metals—you name it,” Dylan states.

Substitutes/alternatives

‍Modern sourcing tools should allow for easy analysis of alternative proposals from suppliers, enhancing flexibility and cost savings in procurement decisions.

Supply chain goals

‍Incorporating supply chain goals such as sustainability and risk mitigation into the sourcing process ensures alignment with broader corporate objectives.

Corporate goals

‍Aligning sourcing strategies with corporate goals such as cost reduction, quality improvement, and innovation drives strategic outcomes and enhances overall business performance.

Investing in advanced sourcing tools isn’t just a technological upgrade; it’s a strategic move that delivers tangible benefits. Organizations can expect significant cost savings, improved efficiency, and enhanced supplier relationships.

Dylan highlights that many clients see a return on investment after just one event, making the case for these tools compelling and clear. “You're going to see an ROI after just your first event. That first single event we do in the system pays for the contract,” he emphasizes.

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Conclusion

The secret sauce to complex sourcing lies in a strategic blend of advanced analytics, centralized data management, ease of use, effective supplier engagement, and seamless integration. Moving beyond traditional tools like Excel and adopting modern sourcing solutions like Keelvar can unlock unprecedented efficiencies and drive superior results in procurement.

Curious to see how it all comes together? Watch the full webinar on-demand and get ready to revolutionize your sourcing strategy.