Quickly transition to efficient remote sourcing

Key problems companies are facing in today’s fluid environment

• Most commodity prices are falling, but precious items are scarce and in high demand. Supply chains are disrupted globally and locally. The current environment will force companies to rebalance between lowest cost, security of supply and broader business continuity measures
• Productivity is impacted because:
  • Processes and decision authorities are not designed to respond rapidly, particularly while teams are figuring out how to work remotely
  • A large part of the workforce will have lower productivity, either from illness or lockdowns which limit ability to work or slow adoption of new digital tools
• Typical sourcing approaches need to be adjusted to recognise the need for greater agility, and a fluid supply chain landscape

Remote Sourcing is a key capability to achieve resilience during the crisis

• Shave-off premiums and benefit from commodity price drops
• Continuously risk proof your supply chain for certainty of supply
• Making your remote team more efficient
• Remote coach to embed processes and enhance crisis management capabilities

What can organisations do to quickly embed and take advantage of Remote Sourcing?

• Update the current sourcing processes
  • Revise delegation of authority and approval process to drive faster decisions
  • Update standards and tools for remote supplier interactions (negotiations, qualifications, etc)
  • Prioritise high value/critical suppliers and lock in alternate agreements that assure best prices and supply certainty
  • Identify products with emerging scarcity and lock in alternate agreements (you may want to selectively revisit previous ‘make vs. buy’ decisions and even de-mothball manufacturing sites)
  • For all other markets/commodities with a supply surplus, use remote sourcing capabilities to proactively arbitrage prices 

• Embed an ongoing risk proofing process
  • Develop a live dashboard to monitor local and global supply chain risks (ideally, leverage supply chain control towers solutions)
  • Assess and monitor resilience of your suppliers’ suppliers and identify/ source alternatives
    
    
• Create real time transparency on status of risks, savings and actions
  • Establish a virtual control room to drive actions, alignment and transparency (24/7 for global initiatives)
  • Monitor and report real-time risks, savings, and activities on virtual dashboards
  • Drive fact based daily problem-solving and prioritisation 

• Move to on-line platforms for tight sourcing process, tasks and stakeholder management
  • Use E-sourcing tools to run RFPs (e.g. Market Dojo, Determine, Astras, Jaggaer, etc)
  • Leverage on-line tasks management tools for prompt task re-allocation when priorities change or team members become unavailable (e.g. SpeedSource)
  • Establish virtual cadence and move to digital tools to drive fast cross functional alignment and decision making

• Build your team’s capability through remote coaching and drive performance through regular reviews
  • Set up clear expectations on team members’ increased level of autonomy, accountability, expected behaviours
  • Hold regular remote training to ensure remote sourcing and negotiation toolkits are fully leveraged to ensure aligned, outcome-driven sourcing
    • Maintain digital Q&A and knowledge sharing channels
    • Coach real time by facilitating problem solving sessions, ensuring that team members are comfortable to make decisions fast. Follow ‘See-Do-Teach’ approach
    • Increase frequency of one-to-one feedback to drive faster behaviour change

Case studies

Remote negotiations and COVID-19 impact

A major Australian organisation with an extensive retail footprint had embarked on a large cost transformation. We were helping reduce their $150+m of third party spend. Partway through this work, the COVID-19 pandemic required a rapid transition to completely remote operations – this included supplier negotiations, stakeholder and team management practices.

Global remote sourcing

A global chemicals and plastics organisation with 121 locations in over 23 countries engaged us to drive savings across multiple categories. Remote sourcing was deployed to drive results from a fractured vendor base at pace - none of the potential vendors was able to supply more than 15% demand. It included the setup of two 24-hour call centres (incl. Mandarin speaking) and issue of 1,000+ e-RFPs globally.