© 2011 Sixhills Consulting LtdRealise short-term savingsInstitutionalise Savings to gain long-term benefits a. ObjectivesAggressive Sourcing• Supplier consolidation• Changes to procurement policies• Product respecification• Alternative supplier identification• Demand management• Fact based multi-round negotiations• Philosophy of a ‘centre-led’ procurement organisation• Development of strategic procurement in line with overall corporate strategy• Re-engineering of procurement processes• Tracking and monitoring based on unit costb. Key PrinciplesThe focus of Aggressive Sourcing is to realise savings and institutionalise the necessary process and organisational changes. The methodology is built on strategic reverse marketing explicitly detailed supplier industry knowledgeAggressive SourcingStrategic Reverse Marketing*. An industry-by-industry – as opposed to overly generic or tactical – approach to procurement• Reverse engineering of industry economics and underlying marketing strategies• Customised solutionsMetrics. Extreme rigour and precision in measurement of purchasing performance• Cost metrics• Quality definitionFree Market. A bias towards market-based solutions and approaches• Market feedback (rather than internal re-engineering) for defining specifications• Free-market bidding and negotiation to set price• Outsourcing where feasible and justifiedMonitoring. Unrelenting persistence in ensuring implementation and monitoring• Practical monitoring tools• Early warning processesPrinciples in direct opposition to traditional marketing* the 4Ps of the traditional marketing mix (Product, Price, Place, Promotion) are taken directly into the control of the clientPerspectives on Business to Business RelationshipsP5
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