Learning Objectives:
• Best practices on the process of strategic sourcing
• Tips on how to negotiate the best pricing from your vendors
• Best practices for implementing contract pricing
• Common risks associated with failed implementations
• How the right tools can ensure long-term cost savings
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How to Implement Savings Solutions in Your Business That Last
1. Hosted by:
How to Implement Savings Solutions that Last
#SustainSavings
@Procurify
@SustainLLC
2. …
Guest Expert: Andrew Williams
Founder of Sustain, specializes in generating operating expense savings for businesses.
Averages 30% savings for every dollar reviewed.
Helped over 100 organizations save money.
Has generated over 1 million dollars in savings for private, charter schools, and higher ed.
Passionate about bringing procurement best practices to companies of all sizes.
SUSTAIN Your Profits #SustainSavings
@Procurify
@SustainLLC
3. Pi Powerpoint Template 3
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Process to Saving Money
How to Implement Savings Solutions That Last
Determine Top
expense Categories
to Target
Analyze and
Baseline Data,
current situation
Set Savings
Objectives, Strategy
Negotiate Contract
Pricing, Service
Implement
Solutions
Monitor
Results
#SustainSavings
@Procurify
@SustainLLC
5. Pi Powerpoint Template 5
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Case Study
How to Implement Savings Solutions That Last
Overview of the process
followed by Sustain to achieve
Cost Savings.
Process
Overview
Sustain and client strategy and
deliverables to equal success.
Joint Strategy
Overview of the work done by
Sustain to get Cost Savings
results.
Scope of Work
#SustainSavings
@Procurify
@SustainLLC
6. Pi Powerpoint Template 6
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Case Study
How to Implement Savings Solutions that Last
Annual Spend
55,000
30,000
15,000
10,000
Vendor A $55,000
Vendor B $30,000
Vendor C $15,000
Vendor D $10,000
TOTAL $110,000
#SustainSavings
@Procurify
@SustainLLC
7. Pi Powerpoint Template 7
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Case Study
How to Implement Savings Solutions that Last
25-28%
30-32% 12-15%
Vendor A Vendor C
Vendor B
#SustainSavings
@Procurify
@SustainLLC
8. Pi Powerpoint Template 8
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Case Study
How to Implement Savings Solutions the Last
$30,800
$35,200
$16,500
$-
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
Vendor A Vendor B Vendor C
Annual Savings
#SustainSavings
@Procurify
@SustainLLC
9. Pi Powerpoint Template 9
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Now What? Best Practices for Implementation
How to Implement Savings Solutions that Last
Negotiating good pricing is only half the battle. Implementation can be the biggest hurdle.
Confirm final details with vendor for all customized needs for your school as determined by internal stakeholders.
Notify all staff and faculty of the results, and generic reasoning behind the decision. Extract detractors.
Create master list of all “contracted items”, and vendor profiles. Easy access for requestors and purchasers.
Monitor and track vendor compliance on pricing levels, make adjustments for commodities, submit credits.
Monitor and track internal compliance and behavior to ensure savings are realized.
Address Maverick spending during the requisition stage.
Stick with your decision for at least 1 year if possible. Avoid wasted price shopping. #SustainSavings
@Procurify
@SustainLLC
10. Pi Powerpoint Template
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Common risks: implementation without Procurify
How to Implement Savings Solutions that Last
Without a controlled process and atmosphere. Price shopping, and wasted time is common.
No centralized access to the master list of “contracted items” for all vendors and categories.
Tracking of supplier compliance is a very manual process. Retroactive and a process drag.
No way to proactively avoid Maverick spending with other vendors.
No easy way to ensure internal compliance with contracted items.
Problem: Tendency for savings to drop off
slowly as time goes on.
No transparency, and accountability to ensure budget compliance.
10
#SustainSavings
@Procurify
@SustainLLC
11. Pi Powerpoint Template
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With Procurify
How to Implement Savings Solutions that Last
Controlled, easy to use software platform that people will use efficiently. Discourages wasted shopping.
Centralized access to approved vendors, and contracted items for all categories. Huge time savings.
Tracking of supplier compliance for all vendors can be done done proactively vs reactively.
Notification based approval routing process completely eliminates Maverick spending.
Internal compliance and purchasing behaviors can be tracked real time.
Solution: Savings levels are achieved
long term.
Budget transparency at the point of request and purchase ensures accountability.
11
#SustainSavings
@Procurify
@SustainLLC
12. Pi Powerpoint Template
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Contact Us
How to Implement Savings Solutions that Last
407-514-2744
305-720-1659
sustain@sustainsolutions.com
linkedin.com/sustainsolutions
twitter.com /sustainsolutions
4767 New Broad Street, Orlando FL, 32814
12
#SustainSavings
@Procurify
@SustainLLC
Notes de l'éditeur
Overview of the Sustain Cost Savings Process
Strategy:
Vendor A was the preferred supplier, it needed to be substantial savings in order to justify a switch to alternate vendor.
Vendor B was the only preferred alternative vendor.
Strategy was to utilize leverage of competition to focus on generating savings with incumbent supplier Vendor A. Focusing on the largest annual expense items purchased. Expand the scope of products they can provide into the cleaning supplies category.
Process:
Analyzed 1,000's of invoices representing over 2,000 sku numbers to determine annualized utilization, per unit cost, UOM, description, rebate information, and special BOGO for high volume items.
Confirmed all of that data with the incumbent to determined a true baseline for every item.
Developed a Request for 2,000+ skus representing over 90% of annualized volume. Removed 1 time buys, and items not frequently ordered.
Scope of Work:
Between myself and other team members, close to 1,000 hours were spent on this category to achieve the following results.
Received bids back from
1) Vendor A
2) Vendor B
3) Vendor C
Analyzed every 2,000 sku line item to ensure
1) Accuracy
2) Apples to Apples products
3) Savings
Went through 4-5 rounds of intensive negotiation, and rebids with Vendor A, and Vendor B. Focused on the largest expense items to allow them to go back and get better deals with their manufacturers.
Savings range is for identical product quality currently purchasing. Alternate savings includes recommendations by bidding vendor to save more money with another manufacturers product of similar quality. Will discuss individually the larger opportunities
Received bids back from
1) Vendor A
2) Vendor B
Analyzed every 885 sku line items to ensure
1) Accuracy
2) Apples to Apples UOM
3) Savings Opportunity
Went through 2-3 rounds of intensive negotiation, and rebids with Vendor A, and B. Seems to be an industry that is very competitive between suppliers so had to ensure even playing field for comparison. Focused on the largest expense items to allow them to go back and get better deals with their manufacturers.
This level of pricing is stipulated on the extra volume picked up from 1 vendor being chosen between Vendor A, and B. If not, then pricing cannot be extended.
Savings range is for identical product quality currently purchasing. Alternate savings includes recommendations by bidding vendor to save more money with another manufacturers product of similar quality. Will discuss individually the larger opportunities