Look Inside Your Own Company for Know - How

Today’s guest blogger is my colleague James Baehr, a Senior Advisor at Greybeard Advisors LLC, and a contributing author of the highly-endorsed book “Next Level Supply Management Excellence: Your Straight to the Bottom Line Roadmap.”

Recently, a major sourcing initiative, worth nearly $100 million in products and services, was launched by a company new to the strategic approach.

The company was in serious need of making something good happen to control this significant spend. They applied a disciplined process that was new and therefore a challenge to understand for all the suppliers; however, the company did what it could to educate the suppliers on the importance of understanding, accepting and following the strategic sourcing process.

There was one notable exception – the incumbent supplier. The incumbent supplier was well entrenched and very comfortable with business as usual. All was good at first – the incumbent supplier’s sales team assured their customer that they “definitely understood” strategic sourcing. In fact, their Procurement group had been doing it for years with great success. However, while all the prospective suppliers did what the process called for, the incumbent decided that the “business as usual” approach was all that was needed to retain the business.

As a result, the sourcing team became frustrated with the tactics being employed by the incumbent sales team. Recognizing that this was not good for either side the Team Leader made this suggestion – “You’ve told us that your company has been applying strategic sourcing for years. Why don’t you sit down with your Procurement professionals and ask them to help you to better understand why following the process is so important”.

The sales team ignored the suggestion and as a result lost a significant amount of the business. It’s hard to understand why sales teams overlook a very valuable source of expertise that’s in their own company – on the same side!  And, in fairness, this goes both ways. Sourcing teams should be willing to work with their in-house sales professionals to learn all that they can about “sales think.”

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