Crafting a Solid Baseline Without Historical Data: The EmpoweringCPO Way
What is Baseline? Baseline preparation is one of the most important phases during any Strategic Sourcing process.
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In today’s competitive business landscape, organizations are constantly striving to maximize cost savings and improve their bottom line. However, realizing the projected savings from strategic sourcing projects can prove to be a significant challenge, especially for categories with numerous suppliers, SKUs, and line items. As organizations navigate through complex procurement processes, they often find that a substantial portion of the reported savings is not fully realized in practice due to absence of savings tracking tool. This discrepancy can hinder the company’s financial performance, leading to missed growth opportunities and unmet expectations.
Several factors can contribute to the loss of savings in the procurement process. Some of the most common reasons include:
One of the primary reasons for savings loss in procurement is the occurrence of price discrepancies. These discrepancies can arise when the actual prices paid for goods or services deviate from the negotiated prices during the sourcing process. This non-compliance can stem from several factors, such as unexpected price increases from the vendor, communication gaps between the sourcing team and the vendor, or a lack of proper oversight in the purchasing process. As a result, the organization may end up paying higher prices than anticipated, leading to a significant erosion of the projected savings which could have been mitigated with the use of comprehensive Spend Analytics Dashboard.
Another common reason for savings loss is the discrepancy in purchasing quantities. In some cases, the quantities procured from contracted vendors may be lower than initially planned. Such practices not only dilute the negotiated savings but also introduce additional risks, including strained supplier relationship and disruption to the organization’s procurement strategy.
A third reason for savings loss is the placement of orders with non-contracted vendors. This non-compliance can occur when organizations choose to source goods or services from vendors that were not part of the initial strategic sourcing process, often due to circumstances such as stock unavailability, quality concerns, or late deliveries from the contracted vendor. While turning to non-contracted vendors may address immediate needs, it undermines the negotiated savings, as these vendors may not offer the same competitive pricing or favorable terms as the contracted suppliers. Moreover, frequent reliance on non-contracted vendors can lead to a fragmented procurement process, making it more challenging to track and manage savings effectively.
By understanding these common reasons for savings loss, organizations can implement measures to minimize non-compliance and ensure that their procurement strategies yield the desired results. This includes fostering better communication between the sourcing team and vendors, enhancing visibility into the purchasing process, and adopting effective tools and techniques to monitor and track savings compliance consistently.
EmpoweringCPO’s Savings Compliance Tracking service part of strategic sourcing services is a comprehensive solution designed to help organizations monitor and manage their savings compliance effectively. By leveraging their expertise in data modeling, analytics, and number crunching, EmpoweringCPO develops procurement savings tracker provides in-depth insights into the procurement process, identifies areas of non-compliance, and recommends strategies to improve savings realization. The service is tailored to each client’s unique needs, ensuring a customized approach that addresses specific challenges and delivers tangible results.
A cornerstone of EmpoweringCPO’s Savings Compliance Tracking service is the advanced data modelling and analysis. Their team of experts leverages cutting-edge techniques to process and interpret complex procurement data, identifying trends, patterns, and areas of non-compliance. This in-depth analysis enables clients to gain a comprehensive understanding of their procurement process, facilitating more informed decision-making and driving better savings compliance.
To ensure consistent and optimal savings compliance, EmpoweringCPO provides weekly tracking of clients’ procurement performance. This regular monitoring allows organizations to stay abreast of their progress, promptly address any issues or deviations, and maintain a proactive approach to managing their savings compliance. By providing timely and accurate insights, EmpoweringCPO empowers clients to optimize their procurement strategies and achieve their financial goals.
Recognizing that each organization has unique needs and challenges, EmpoweringCPO creates customized tools and dashboards tailored to the specific requirements of each client. These tools offer real-time visibility into procurement data, enabling organizations to monitor their savings compliance effectively and make data-driven decisions. By offering a personalized and flexible solution, EmpoweringCPO ensures seamless integration with clients’ existing systems and processes, enhancing the overall user experience and delivering optimal results.
EmpoweringCPO’s team of experts possesses exceptional analytical and number-crunching skills, allowing them to dive deep into the procurement data, identify patterns and trends, and provide actionable insights that drive better decision-making.
EmpoweringCPO maintains a strong commitment to delivering high-quality services, adhering to strict Service Level Agreements (SLAs) and Turnaround Time (TAT) for report preparation and dashboard updates. This ensures timely and accurate insights for clients, enabling them to stay on top of their procurement performance.
To facilitate effective savings compliance tracking, EmpoweringCPO offers supporting tools and mobile applications tailored to each client’s needs. These tools provide real-time visibility into procurement data, enabling organizations to make informed decisions and improve their savings compliance.
EmpoweringCPO’s technology-agnostic approach allows them to create customized tools and dashboards based on each client’s preferred technology platform. This flexibility ensures seamless integration with the client’s existing systems, enhancing the overall user experience and delivering optimal results.
In the healthcare sector, EmpoweringCPO successfully managed savings compliance tracking for a large client following the execution of a strategic sourcing project for pharmaceutical products. The project required exceptional data modelling, analytical, and number-crunching skills to track weekly savings compliance and ensure that medical experts were prescribing the shortlisted brands.Â
Effective savings compliance tracking required collaboration with medical experts to ensure that the prescribed brands align with the organization’s strategic sourcing objectives.
EmpoweringCPO leading strategic sourcing companies worked closely with medical professionals, providing them with the necessary data and insights to make informed decisions regarding brand prescriptions. This collaborative approach ensured that the healthcare organization’s procurement strategy remains aligned with its clinical goals, resulting in better savings compliance and improved patient outcomes.
By providing actionable insights and continuous monitoring with integration of procurement market intelligence, EmpoweringCPO helped the client optimize their procurement process and realize the projected savings.
For a large USA-based FMCG manufacturing company, EmpoweringCPO tracked their savings compliance for the Maintenance, Repair, and Operations (MRO) category. The company faced challenges in managing a vast array of suppliers and SKUs, resulting in significant savings loss. EmpoweringCPO’s Savings Compliance Tracking service identified the areas of non-compliance, enabling the company to address the root causes and improve its procurement process, ultimately leading to better savings realization.
One of the key benefits of working with EmpoweringCPO’s Savings Compliance Tracking service is the improvement in supplier relationship management. By closely monitoring procurement performance and identifying areas of non-compliance, organizations can engage in constructive discussions with their suppliers to address issues and optimize their partnerships. This collaborative approach fosters stronger relationships, enhances supplier performance, and ultimately leads to better savings compliance and overall business performance.
EmpoweringCPO’s service provides organizations with enhanced visibility into their procurement process, offering real-time insights and a comprehensive understanding of their purchasing activities. This increased transparency allows for more informed decision-making, enabling organizations to optimize their procurement strategies, drive savings compliance, and achieve their financial objectives.
With EmpoweringCPO’s expertise, organizations can implement streamlined and efficient purchasing practices that align with their strategic sourcing goals. By identifying areas of non-compliance and addressing the underlying issues, companies can improve their procurement process, reduce maverick buying, and ensure that their purchasing activities are in line with their financial targets. This leads to a more organized and efficient procurement function, contributing to better savings compliance and overall business success.
EmpoweringCPO’s Savings Compliance Tracking service not only helps organizations monitor their savings compliance but also enables them to identify and mitigate potential risks in their procurement process. By leveraging their advanced analytical capabilities, EmpoweringCPO’s team can pinpoint areas of concern, such as supplier performance issues, quality problems, or potential price fluctuations. Armed with this information, organizations can proactively address these risks and implement measures to prevent their impact on savings compliance and overall procurement performance.
In today’s highly competitive business landscape, effective savings compliance tracking has become a critical factor in ensuring the success of an organization’s procurement strategy. By proactively monitoring and managing savings compliance, companies can optimize their purchasing practices, improve supplier relationships, and ultimately achieve their financial objectives. As global supply chains continue to evolve and become increasingly complex, the need for robust and reliable savings compliance tracking solutions has never been greater.
EmpoweringCPO is committed to delivering high-quality, world-class service to its clients, helping them navigate the challenges of savings compliance tracking and achieve their procurement goals. By leveraging their extensive expertise in data modeling, analytics, and number-crunching, EmpoweringCPO provides clients with in-depth insights, customized tools, and practical solutions that drive results. Their strict adherence to SLAs and TAT, technology-agnostic approach, and exceptional analytical capabilities set them apart in the market, making them a trusted partner for organizations seeking to improve their savings compliance.
For organizations seeking to enhance their savings compliance and strengthen their procurement processes, EmpoweringCPO’s Savings Compliance Tracking service offers a comprehensive, innovative, and results-driven solution. By exploring EmpoweringCPO’s offerings and harnessing their expertise, companies can unlock the full potential of their procurement strategies, drive better savings compliance, and ultimately achieve lasting success in the modern business world.
These are quite recently the absolute most normal inquiries we get inquired.
Realizing savings is often complicated due to multiple factors like price discrepancies, incorrect purchasing quantities, and using non-contracted vendors. These complexities make it challenging to fully realize reported savings, which can impact your financial performance negatively.
Three main culprits usually cause loss of savings:
Our service uses data modeling, analytics, and number crunching to closely monitor and track your savings compliance across various categories. This ensures that you are making informed decisions, optimizing procurement processes, and achieving your financial goals.
Partnering with us offers multiple benefits:
Certainly! We’ve had success in sectors like healthcare, tracking savings compliance for pharmaceutical products. In the FMCG manufacturing sector, we’ve helped a major U.S.-based company in the MRO category. These case studies demonstrate our ability to optimize procurement processes and realize projected savings.
Our tools are tailored to meet the unique needs of each client, providing real-time visibility into procurement data. These tools are technology-agnostic, ensuring seamless integration with your existing systems.
Our team of experts leverages cutting-edge data modeling and analytics techniques to provide in-depth insights into your procurement processes. This enables us to identify patterns, trends, and areas of non-compliance, empowering you to make data-driven decisions.
We adhere strictly to the agreed SLAs and TAT, maintaining a 99% adherence rate to ensure timely and accurate insights for our clients.
To begin, you can reach out to us via our contact details or through our client portal. We’ll then work closely with you to understand your specific challenges and tailor our services accordingly.
We’re always here to help. Feel free to reach out to us directly for any more specific queries or clarifications. Our team is readily available to provide the information you need.
What is Baseline? Baseline preparation is one of the most important phases during any Strategic Sourcing process.
A cartel is formed when businesses agree to act together for an anti-competitive purpose instead of competing against each other.
Spot Buying is for immediate, Ad-Hoc & one-off purchases. It’s estimated that around 40% of the company’s indirect spending is from spot buying.
Compliance management is very critical as otherwise the procurement organization may run into a scenario where there is a huge gap between realized savings and reported savings. Many procurement functions estimate large savings numbers when contracts are signed. They also invest significant time and effort in negotiating contracts for necessary goods and services, only to have a third or more of their purchasing dollars flow outside those deals. Some of the obvious fall-outs of non-compliance and maverick purchases are:
As compared to the current contract that was finalized after the sourcing process, the tool helps in tracking:
The objective of this tool is to ensure that the orders are placed only with the vendors that were shortlisted after the sourcing process and at the same price that was agreed upon and negotiated during and after the strategic sourcing process.