Unconventional procurement is key to future success

Conventional procurement is dead—and if you continue to rely only on it,
you increase your chances of dying along with it.
Mickey North Rizza
BravoSolution, Vice President of Strategic Services
Merriam Webster defines “conventional” as typical, ordinary and
the usual. Applying conventional to procurement diminishes
the organization because it exists as an elementary step to
quickly satisfy needs verses seeking opportunities to secure
unlimited value. The world has moved beyond reactive,
conciliatory, scattered procurement teams narrowly focused on
spend management, savings and transaction management. While
a view of spend is required to gain visibility to external purchases
within the organization and to make plans for improvements,
it isn’t the be-all and end-all. The conventional procurement
approach de-emphasizes the supplier and promotes the buyer to
leverage spend and exert power over the supplier. While it may
be useful to get the first deals for basic items like office products,
it doesn’t do much to promote collaboration or innovation, or
to bring sustainable value to your more strategic suppliers that
enhance revenue and profitability.
Conventional procurement is dead—and if you continue to
rely only on it, you increase your chances of dying along with
it. It is no longer a procurement world focused only on spend
management and controlling spend but rather on meeting the
needs of the business, stakeholders, customers and yes, even
the suppliers.
Ten Steps to Unlock the Power
of Procurement
217 N. Jefferson St., Suite 400, Chicago, IL 60661
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info@bravosolution.com
www.bravosolution.com
A global $9B pharmaceutical company with a
decentralized procurement organization spent two years
centralizing their spend management process. The process
helped secure more savings from indirect suppliers and was
considered a hit within the company. The same spend
management process was also introduced for new drugs
from development through FDA approval, to manufacturing
and sale of the drug. Unfortunately, the “power over the
supplier” mentality was applied and this company lost an
opportunity to bring a new drug to market with a new bottle
and shelf package. Instead, the chosen supplier simply
utilized a standard package to keep their price low as
requested. This supplier then shifted the new packaging
design to another pharmaceutical company with a similar
product. The competing company sold more of their product
in the new package because the package made it easier for
the patient to receive the required dose. The value to the
first company was great in terms of savings and margin, but
the value to the second company and the supplier was even
greater because of repeat sales based on design and use
versus just the medication. The first pharmaceutical
company traded off value for cost savings.

Unlocked Procurement
Unlocked procurement utilizes spend management practices
where needed but places more focus on the supplier, one of
the main reasons the procurement function exists within
an organization—to manage the suppliers and their spend.
“Unlocked” is defined by Merriam Webster as becoming
unfastened or freed from mistakes. When applied to procurement,
unlocked procurement provides an avenue to grow revenue and
profitability focusing on the supply markets, the innovation and
the collaboration from customer to stakeholders to the suppliers.
Moving to unlocked procurement requires a significant shift
in the optimization of resources, more focus on the supply
markets, and the development of a more opportunistic attitude
to secure valuable business outcomes. A critical factor in moving
to unlocked procurement is developing, acquiring and optimizing
resources, including customers and suppliers.
Unlocked procurement may sound simple but it isn’t. It starts
with the organization procurement is representing. Too many
organizations still look at their procurement team as conventional.
Conventional procurement departments react to what the
stakeholders want and require. They fulfill purchase requests
efficiently and focus on completing the transactions and
workload while meeting the basic business needs. Conventional
procurement teams have little time to focus on the larger value
their stakeholders ultimately hope they will deliver.
It is easy to point out faults but not so easy to move beyond
conventional. Procurement may want to move forward but
typically it spends more time defending its position versus
focusing on the outcomes, rallying support and making changes.
Change management is never easy but to uncover procurement’s
power and move to unlocked procurement, the organization
must look within to move beyond conventional. It must change
itself and as this change evolves, the procurement organization
will positively change its image with stakeholders and this
transformation will bring real value to the business.
There is a natural progression procurement organizations take on
their journey to unlocked procurement. Typically, procurement
teams plateau at each level of developed maturity and these steps
become natural placeholders for procurement to understand the
maturity progression.
Level 1: Conventional Procurement: At an elementary level
procurement is reactive, transactional and efficiency motivated,
with an internal spend view and scattered procurement services
and delivery.
Level 2: Optimized Procurement: Sourcing capabilities are
developed with total cost of ownership and demand management
seen as critical to procurement services and delivery.
Level 3: Comprehensive Procurement: This level builds mature
category management, some supplier relationship management,
alignment of procurement with business strategies, and center-led
procurement services and delivery.
Level 4: Unlocked Procurement: Procurement harnesses
the supply markets for competitive advantage such that
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A county government put a requirement in place for
more transparency and cost cutting. Because of the new
requirement, the county procurement manager met
with procurement teams in cities and municipalities to
start leveraging the supply base across the county. As a
result, the procurement teams began leveraging supplier
agreements for lifts, janitorial supplies and fuel. In
addition, the procurement teams began working closely
on fleet maintenance agreements and waste management
aspects to leverage buying power and supplier best
practices, with the goal to secure better outcomes for the
entire community. The suppliers were willing to work locally
as well as across the county to obtain more business and to
offer ideas on optimizing costs. The fleet maintenance
suppliers offered set maintenance timeframes based on
vehicle mileage and warranty requirements—plus brake, tire
and vehicle fluid checks and yearly annual inspections. The
waste management suppliers developed several new con-
tainer collection ideas, county collection schedule variations
to optimize sanitation costs, and options for recycling
drives (such as electronics, furniture and yard waste) to
encourage greener practices within the county. More value
for the money was the key driver of the county’s initiatives.

value increases, with total value management and optimized
procurement services and delivery.
The Ten Steps
Unlocking the power of procurement takes time and is an
adventurous journey. It is an investment in oneself, the
organization and maturity. It is a movement that brings forth
greater procurement value contribution. Achieving greater value
contribution isn’t easy. But when broken into smaller steps,
unlocking the power of procurement becomes less daunting,
more attainable and truly rewarding. Below are ten steps to help
you on your journey to unlocked procurement.
Step 1: Moving from ‘e’fficient to ‘e’ffective and Value-Driven
Efficiency is required to run a tight ship and and is typically the
largest driver in conventional procurement. Effectiveness and
a value-driven approach, combined with efficiency, are critical
components to realizing unlocked procurement. To discover
where you are on the journey to unlocked procurement, look at
your procurement metrics:
• What is it you are measuring?
• What metrics are you using to improve behavior both internally
and with suppliers?
• What value do you derive from the metrics and how does that
unlock the power of procurement?
Important points to take into consideration include a combination
of metrics that look at efficiency factors of internal and supplier
performance, combined with effectiveness measures—financial
metrics, internal customer satisfaction metrics—plus value
metrics such as procurement ROI.
Moving from efficiency to effective and value-driven is a shift in
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The Next Generation of Procurement
Unlock Procurement
As procurement organizations mature and basic goals are achieved with conventional procurement initiatives,
evolving organizations realize there are greater opportunities to deliver organizational value.
ValueCaptured
Procurement Maturity
Conventional
Procurement
Optimized
Procurement
Comprehensive
Procurement
Unlocked
Procurement

measurement principles. Efficiency metrics are defined as how
well you did something. Effectiveness metrics are defined as how
you did it. Value-driven is defined as the value you produce and
obtain for a specified outcome that makes a difference in some
societal and financial way. Typically value-driven metrics are based
on a collaborative outcome with customers, stakeholders and
suppliers. During discussions, practitioners have noted
Step 2: Moving from Reactive to Proactive
Operating principles define the way procurement operates and
serves the customers. Reactionary procurement responds to
events after they occur. Proactive procurement anticipates and
makes changes before they can occur. Becoming and staying
proactive is critical to unlocked procurement.
Proactivity leads to greater innovation, collaboration and market
disruption, all which translate to tangible value. Proactive
procurement opens up the mind to move beyond core processes
and spend within the business, to extracting greater value outside
the business because proactive procurement focuses on the
supply markets and suppliers themselves.
What operating principles do you use? Look at the various
principles and select where you are now. Can you envision how a
more proactive approach can benefit your organization?
Step 3: Scattered vs. Optimized Procurement Service and
Delivery
Procurement service and delivery requires the right structure,
processes and technology coupled with the right employees to
meet business needs. This strategy must also be communicated
and executed within the organization. Every organization is
different and the value levers required from procurement are
also different.
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Efficiency Metrics Effectiveness and Value Metrics
Cost Savings/Cost Avoidance
• realized savings as a % of identified savings
• refunds, credits and rebates from suppliers
• value of improved warranties
• value of negotiated additional benefits
Supplier & Industry Development
• potential local suppliers identified
• # of new sources of particular goods and services
• # of suppliers in supplier development programs
Supplier Performance
• on-time delivery
• quality
• negotiation
• cost targets
Efficiency of Internal Procurement Systems & Processes
• % of electronic procurement spend
• % of Pcard spend
• % of spend under contract
• requisition to order cycle time
• source to contract execution cycle time
• order to delivery cycle time
• procurement operation costs as a % of managed spend
• reduction in transactions & inventory management costs
TVM: Highest Value to Cost Ratio (evaluates & minimizes risk)
Value Creation: Economics and Societal Benefits Relative to Costs
Profitability Increase
Time to Value
Returns to Shareholders
# and Types of Ideas/Patents Generated & Implemented
per Supplier
# and Types of Ideas/Projects in the Innovation Pipeline with
Projected Value
Net Present Value of New Product Portfolio
ROI on Innovation Projects
Revenue Increase
Improvements of EVA, ROIC, ROA
Source: ISM, CIPS, Spend Matters
collaboration between buyers and suppliers
adds as much as 20 times more value than the
average supplier contract achieves.

While structure is also important, the kind of service delivered
to the organization is the critical juncture leading to unlocked
procurement. Ask yourself if you are delivering real value with
satisfied customers asking for more? Optimizing resources
includes the best mix of talent, business processes and
technology. Some organizations spend a great deal of money
on technology that delivers little value. In order to make the
technology work, they add more people, increasing costs, further
eroding value. This is a no-win situation with too much cost and
too little delivered value. The best procurement teams optimize all
their resources as they:
• Hire the right people, outsource portions of the business to cut
costs, and match the talent to short- and long-term business
requirements.
• Not only work internally on their own processes, but work
beyond the organization, utilizing an efficient and effective
horizontal business process and then match this with value-
driven supplier processes.
• Define their technology needs and match the best vendors to
their roadmap. The best teams are constantly challenging the
technology status quo, and stay ahead of their business by using
only the best vendors.
Step 4: Conciliatory vs. Opportunistic
Moving to unlocked procurement requires the organization to
stop being conciliatory. Procurement cannot continue to just
accept what they get in terms of budget, specifications, and pre-
selected suppliers—nor can procurement stop negotiations once
the requirements have been met. The process is about exceeding
expectations and building a world-class procurement structure
that leads organizational growth.
Becoming less of a conciliator requires a paradigm shift.
Procurement must stop being the middleman, negotiating the
deals and mediating disputes between the buyer and supplier.
Instead, procurement must start redefining the relationship
between the buyer and supplier, taking a holistic view on how to
create meaningful value for all parties and influence innovation.
The paradigm shift is about unlocking the potential opportunity
of the buyer and supplier and creating value together.
Unlocked procurement requires procurement to be focused on
the holistic view and opportunity, adding business value so it
exceeds established (or conventional) business expectations.
Business value may be processes that are reconfigured by
procurement and stakeholders to be lean and horizontal;
procurement being involved early in the design phase of a new
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Reactive
• Procurement is a cost center
• Procurement receives a specification
• Procurement rejects defective materials
• Procurement reports to Finance or Operations
• Procurement responds to market conditions
• Problems are the supplier’s responsibility
• Price is the main variable for decision
• Emphasis is on yesterday and today
• Technology systems are independent of suppliers
• Negotiation is win/lose
• Plenty of suppliers = security
• Plenty of stock = security
• Suppliers’ communication is one way—”do as I say”
• Process, cycle time and efficiency are metric-focused
• Technology-enabled; low adoption
• Procurement receives information and acts upon it
• Procurement’s main target is cost savings
• Information is power
Proactive
• Procurement can add substantial value
• Procurement & suppliers contribute to the specification
• Procurement avoids defective suppliers
• Procurement is strategic, reporting to CEO
• Procurement influences the market
• Problems are a shared responsibility with the supplier
• Total cost and value are the major decision factors
• Emphasis is on strategy and business plans
• Technology systems may be integrated with suppliers’ systems
• Negotiation is win-win or better
• Plenty of suppliers = lost opportunities
• Plenty of stock = waste
• Suppliers’ and Buyers’ communication at all levels of the organization
• Efficiency and effectiveness are the baseline; metrics are valued
• Technology-enabled, optimized business processes
• Procurement actively pursues outcomes with the business & suppliers
• Procurement can impact revenue, profitability, ROIC and ROA
• Information is valuable if shared
Operating Principles

product; procurement reaching out to the supply base to harness
the largest sources of innovation and facilitate discussions with
suppliers; and procurement recognizing every opportunity
is an opening into value.
Unlocked procurement is about being an opportunist.
Opportunists are not afraid to open the door to others, harness
ideas, build trust, reduce fear and amplify imagination.
Walt Disney said, “You can design and create and build the most
wonderful place in the world. But it takes people to make the
dream a reality.”
Step 5: Extreme Spend Focused vs. Supply Market Focused
Over the past 10–15 years procurement’s intersection with
technology has been focused on improving processes and
gaining visibility into more standardized processes; uncovering
the data of what was spent, why it was spent and with whom it
was spent; and developing category management of the spend
such as how an organization has captured the spend, how the
spend was transacted, sourced, supplied and measured; and the
performance of the overall spend management process. At the
time, this information was valuable—it provided an understanding
of what was bought and who it was bought from, and it helped
gain control of the mountains of data in spend management.
But conventional procurement has a very isolated and inwardly-
focused approach to spend only. Spend management is an
internal control mechanism we use to look at our external spend.
It doesn’t look at the external factors that can contribute more
value and help to unlock the power of procurement.
An organization needs spend information but unless a supply
market analysis is performed, you will never know if the
organization has the right suppliers, are paying the right prices,
or even command an understanding of the market. The 3rd and
4th generation levels (see The Next Generation of Procurement:
Unlocked Procurement chart on page 3) of procurement
organizations look externally to see what markets their suppliers
are in, the current prices, hot market trends, high cost areas, new
processes, new materials, new manufacturers, new markets and
the lower cost region buying options. They look at the supplier’s
lifecycle within the business. They understand what is required of
the purchases they must make, but look externally to understand
the market and bring that knowledge of suppliers back into the
organization. They conduct supplier SWOT analysis (strengths,
weaknesses, opportunities and threats), follow price indices and
look at market forces of demand and supply. A supply market
focus allows you to concentrate on what is important to strategic
procurement—THE SUPPLIER!
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Procurement Services & Delivery
Centralized Decentralized
Center-Led
DisAdvantages
• Lack of focus (e.g., business unit requirement)
• Communication barrier (e.g., with internal stakeholders)
• Common supplier’s different behavior in terms of
geographic or market segments
DisAdvantages
• Loss of better supply opportunity
• Lack of standardization
• Operational against strategic focus
Advantages
• Reduced purchasing cost (bulk purchase)
• Consolidated supplier database
• Strategic focus and improved planning
Advantages
• Better communication with internal stakeholders
• Swift response
• Easily managed cultural, geographical, political,
taxation, etc., issues
Moving from conciliatory to opportunistic
requires an emphasis on designing, creating
and building; it requires collaboration with
team members that are stakeholders, leaders,
customers and suppliers.
Adapted from the Anklesaria Group

Moving to unlocked procurement means you need spend
management as your baseline, but it must be complemented with
a supply market and supplier’s lifecycle focus that ties into your
overall supply base strategy.
Step 6: IT Investments with Low Adoption vs. IT Investment
with Maximized ROI
Conventional procurement wisdom has us focusing on IT
investment prep, roll-out process and implementation. But you
spend so much time doing the basics you get caught up in it
and end up focusing on the go-live instead of focusing on the
outcome and maximizing the ROI.
Conventional procurement teams are pretty clever when looking
for a solution but typically suffer from a few common technology
constraints. These constraints end up amplifying problems,
resulting in the wrong investments or l0w adoption. Key
constraints to be aware of include:
• The not-invented-here (NIH) syndrome is the first line of
defense of conventional procurement. If they can’t build it then
why should they invest in it? Unlocked procurement uses an
opportunistic approach of the best technology vendors to help
you maximize your ROI.
• Conventional procurement is caught up in cool technology
features and functionality but it doesn’t solve the business
problem. Be on guard, as their investment will mean little or
no ROI.
• Sometimes, conventional procurement sets expectations that
miss critical processes or functionality. This may be caused by a
lack of stakeholder or vendor involvement in helping to set the
correct strategy. In some cases, companies select a technology
because it gives them the same processes they have currently.
The companies don’t plan for better, more improved business
processes, visibility or stakeholder engagement—and as a result,
they shortchange themselves.
Maximizing technology ROI requires one to engage with the
vendor, listen to their ideas to understand how others have
reaped more value, and then decide if it makes sense for the
business. It also requires a solid business case, setting the right
expectations, finding the right technology partner, planning
beyond go-live, and measuring the impact and change to show
the ROI. It often requires a leap of faith, something Steve Jobs
knows quite a bit about.
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Spend Management
Internal Facing External Facing
Supply Market
Under Contract
Procurement Control
Addressable Spend
Market Analysis

Jobs said, “You can’t connect the dots looking forward. You can
only connect them looking backwards. So you have to trust that
the dots will somehow connect the future.”
Step 7: Missing Knowledge and Talent vs. Knowledge and
Talent Organized for Success
Procurement as a profession is at a crossroads. Since the 90s,
procurement has utilized more technology from Procure to Pay
to Sourcing to Spend Analysis to Contract Lifecycle Management.
All of these technologies created new business processes
and required new skill sets to move beyond manual business
processes. Procurement has literally consolidated and enhanced
business processes, and improved technology innovation.
Unfortunately, procurement has also left many teams with
knowledge and talent gaps. And procurement is not alone. Supply
chain in general is facing one of the worst talent shortages in
history.
Unlocked procurement organizations are taking deliberate steps
to upgrade talent. Unlocked procurement organizations recognize
that procurement talent must understand the business context,
challenges and opportunities. Unlocked procurement talent
requires a new breed of employees, those that adapt quickly, have
strong relationships, are technologically and analytically savvy, and
are financially sophisticated. It is no longer about the transactional
expert or report guru.
The Chief Procurement Officer (CPO) resource focus is now
augmented with a talent pipeline. The CPO recognizes business
has moved and therefore needs a strategic plan for managing
talent. The strategy focus is on the design or structure of the
organization including the workforce plan; a plan to attract and
prepare new talent; a pathway to assess, develop and improve the
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IT Investment
Maximize ROI
• NIH - Not Invented Here
• Cool tool, but doesn’t solve the business problem
• Set the expectations...and then they are not met
• Do not plan for the business process to be different
• Stick vs. carrot
• Make the business case
- Efficiency
- Asset utilization
- Customer response
• Set expectations
• Find a partner, not a vendor
• Plan beyond go-live
• Measure the impact & change
• Show the ROI
The right people utilizing the right technology
partner to drive the desired business outcomes
will help you maximize your business results.
Low Adoption

current talent; and a plan to retain existing talent. All of this needs
to feed into the roadmap for organization success.
Step 8: Little Organizational Alignment vs. 360° Business
Alignment
How aligned is your procurement organization? Conventional
procurement organizations work in silos, isolated from the rest of
the business. Did you know approximately 65% of organizations
have an agreed upon strategy? Or that only 14% of people
actually understand the organization strategy? And less than 10%
of organizations successfully execute the strategy? With these
dismal results, alignment is actually misalignment.
One of the easiest ways to align within the business is to work
toward common goals with well-designed business processes.
But it must be done right. Mike Hammer noted in The Agenda,
“People who are aligned around a common goal but lack the
discipline of a well-designed business process will go nowhere…
likewise, the best-designed business process has no chance of
survival when people aren’t aligned around the process and
its goals.”
The problem is that even with goals and business processes there
are still misaligned areas. To unlock the power of procurement
you must uncover misalignment and use it to move beyond the
isolated silos of conventional procurement and situation-only
interactions. Three areas of misalignment in any situation are data,
definition and drivers.
Conventional procurement typically uses spend data, but in many
cases hasn’t even tapped into half of all the data. Without a view
of all the spend data, the opportunity for substantial savings is
out of reach. In addition, suppliers miss out on opportunities
for new business and the procurement plan is flawed.
Conventional procurement also looks at definitions and drivers
as internally facing within their own organization—not tying it
into the customers’ and suppliers’ view—therefore, missing the
information that can unlock more procurement value.
Unlocked procurement takes into account the areas of
misalignment and works toward business and partner alignment
using a leadership role to influence the required positive
business outcomes. It influences the business by linking to
the business strategic plan, bringing a unified approach to
all stakeholders, customers and suppliers; and requires all
relationships be based on transparency, accountability and trust.
In addition, procurement is an influencer and continually removes
misalignment barriers while shaping relationships to meet
joint business outcome goals. Unlocked procurement has 360°
degree transparency and alignment across all areas within the
business and externally into the value chain, concentrating on the
supplier’s lifecycle and value throughout.
Step 9: Reward Focused vs. Risk Eliminator
Conventional procurement is focused on cost savings,
transactions, control and compliance of managed spend. And
conventional procurement is rewarded for its accomplishment
of these particular goals. Although conventional procurement
is rewarded for specific goals achieved, they leave real value on
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Misalignment
30% of Misalignment is
due to the data
due to different definitions
due to different drivers
Businesses with unlocked procurement
teams typically have up to 2.5 times better
procurement ROI than their conventional
procurement counterparts.

the table, as shown below in the statistics from the Corporate
Executive Board regarding conventional procurement practices
and uncovered opportunity:
• Potentially lose up to 75% of sourcing savings within the first
18 months
• Fail to establish “customer of choice” status with 95% of their
suppliers
• Develop inconsistent, disparate processes and continuous
improvement initiatives
• Ignore supplier non-conformance worth an additional $60M
of value (on $6B in spend)
• Missed staff productivity up to 7.5%
• Missed supplier collaboration opportunities
Fortunately, businesses are now asking more of procurement.
They also want more collaborative relationships with stakeholders
and suppliers, horizontal transparent business processes and
real value delivered to the business—the foundation of unlocked
procurement. Businesses recognize that with disturbing statistics
like those above, they must move forward to unlock procurement
to turn negative statistics into delivered value.
Unlocked procurement recognizes transactional efficiency,
sourcing effectiveness and supplier relationship management
value are the baseline. Value obtained reaches or extends beyond
this baseline.
One of the largest areas of focus for unlocked procurement is
risk elimination. Procurement is exposed to risk every day in
many areas including personnel, brand/reputational, bribery,
geopolitical, country, currency, disaster and supplier risk. All are
elements of procurement’s larger value delivery and can hurt
the business if left exposed. Unlocked procurement is focused
on mitigating exposure and eliminating risk so more value is
extracted. One such way to eradicate some of the risk is supplier
collaboration and development. Collaborating with suppliers can
lead to new and innovative products. These new products can
eliminate competitors and open up new markets, immediately
enhancing revenue for both your business and the suppliers.
Suppliers are also developed to bring more, and at a faster rate
than their current products, with changes in material, form and
features. High tech brands such as Apple are great supplier
collaborators and exceptional at developing suppliers. Both
avenues not only reduce risk but also bring greater value beyond
the typical contract.
Step 10: Low Supplier Focus vs. Supplier & Partner Focus
Conventional procurement spends so much time managing spend,
processes and efficiency metrics that it is not recognizing the
value from suppliers. Companies that move beyond conventional
procurement have moved from a low supplier focus to a supplier
and partner focus. Recently, John W. Henke, Jr., Ph.D., president
and CEO of Planning Perspectives, Inc., released the 15th annual
North American Automotive - Tier 1 Supplier Working Relations
Index® Study. The study details how better supplier relationships
add more to profitability.
Henke noted three critical characteristics of suppliers’ relations
from the study. In his report:
1. Henke states the better the relations with the suppliers, the greater
the suppliers’ contribution to the OEM profitability; the more
adversarial the relations, the less contribution to the OEM profit.
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Reward vs. Eliminator
Types of Supplier Relationship Management

2. It quantifies the economic value of suppliers’ non-price benefits
to the OEM for such things as supplier sharing new technology,
providing “A team” support to the OEM, providing support that
goes beyond the supplier’s contractual obligation, and other
“soft” benefits.
3. It establishes that the economic value of the suppliers’ non-
price benefits can greatly exceed the economic benefit realized
from suppliers’ price concessions. On average, the economic
value of the suppliers’ non-price benefits can be up to 4 to 5
times more than the suppliers’ price concessions.
While the above details outline what unlocked procurement can
do to bring more value, the proof is in the outcome and data from
the report regarding their Supplier Relationship Management
practices. The report states in one year:
• Ford, GM and FCA lost a combined $1.7 B in profitability
• GM & FCA = $144 lost profitability per vehicle
• Ford = $116 lost profitability per vehicle
The best: Honda & Toyota improved an average of 8.7% in one year.
Using these attributes of supplier relations to move to a more
partner and supplier facilitator role is a requirement of unlocked
procurement. However, it also starts with your sourcing and
segmentation strategy. Unlocked procurement selects the right
sourcing business model based on your level of dependency/risk
and your potential to create value.
Kate Vitasek, a faculty member at Haslam College of Business,
The University of Tennessee with a focus on sourcing, describes
the sourcing business model as the combination of two critical
concepts—what contractual relationship framework is used to
work with the supplier (transactional-, relational- or investment-
based), and what economic model is used (transactional-, output-
or outcome-based).
Kate says, “today’s procurement challenge is stretching one’s
ability to shift from a base of power to a coalition of collaboration
where suppliers are no longer viewed as a necessary evil you have
to control, but rather a sustainable source of mutual competitive
advantage.” But to do so, you must first know who is included
in your supply base, what they do, their capabilities, their
performance, and their lifecycle value to your business, as well as
your value to them. All of this changes the paradigm shift from
“all suppliers are created equal” to those that bring value focused
on the collective outcome-based model concentrated on business
results.
This model creates value through win-win solutions. Unlocked
procurement grows the pie together with suppliers and becomes
a vested relationship for both parties versus fighting over the pie.
Move NOW to Unlocked Procurement
Moving to unlocked procurement is a necessity for organizations
to reap significant value from procurement and the supply base. It
is no longer an option; it is a procurement imperative.
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Procurement must move to unlocked
procurement or risk obsolescence.

About BravoSolution
Supply management executives are now, more than ever, under
pressure to deliver more savings, develop and manage strategic
supplier relationships, accelerate procurement cycles, and
maintain process excellence. Confronted with these diverse yet
consistent challenges, CPOs and sourcing professionals must seek
tailored solutions that deliver rapid ROI to their business.
BravoSolution offers leading software and services to fit the
needs of today’s sophisticated supply management organizations.
Our services organization, one of the world’s largest teams of
professionals dedicated exclusively to sourcing and procurement
consulting, delivers lean, targeted services to support strategic
sourcing and procurement initiatives. Our industry-leading
software toolkit supports the full supply management lifecycle
across myriad industries, geographies and business models.
As of today, over 60,000 procurement professionals in
60 different countries are benefiting from BravoSolution’s
technology and services, while unlocking tangible benefits such
as increased process efficiency, decision support, cost reduction,
improved process governance, greater quality relationships with
vendors, and the ability to share, understand and act upon the
wealth of sourcing-related data held within their organization.
BravoSolution has locations in the United Kingdom, Italy, France,
Germany, Spain, Benelux, United States, Mexico, China, United
Arab Emirates, Australia and the Nordics.
Engage the experienced team. The BravoSolution customer
commitment is to provide exceptional people and smart,
proven, cutting-edge processes to ensure you are successful.
BravoAdvantage is powered by the most extensive team of
global procurement professionals, completely equipped to
help with organizational transformation and management,
implementation, adoption, support and procurement strategy.
The team drives more value for proven customer outcomes,
with more passion than anyone else. Those that work with Bravo
outperform.
Connect with a BravoSolution professional to learn more about
BravoAdvantage and how we can help unlock your organization’s
hidden value and savings throughout the procurement
processes.
12
T: +1 312-373-3100
of Procurement
Start the Movement and Unlock the Power of Procurement
Conventional Procurement Unlocked Procurement
1. ‘e’fficient, learning how to be ‘e’ffective
2. Reactive
3. Scattered Procurement Service & Delivery
4. Conciliatory
5. Extreme Spend-Focus
6. IT Investments with Low Adoption
7. Missing Knowledge & Talent
8. Little Organizational Alignment
9. Reward-Focused
10. Low Supplier Focus
1. e’fficient, e’ffective, & Value-Driven
2. Proactive
3. Optimized Procurement Service Delivery
4. Opportunistic
5. Supply Market-Focused
6. IT Investments = Maximized ROI
7. Knowledge & Talent Organized for Success
8. 360° Business Alignment
9. Risk Eliminator
10. Supplier & Partner Facilitator
To

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