Targeted Procurement Strategies (Strategic)

Previously we have considered the tactical and the leveraged targeted procurement strategies.  During this intervention we will be considering the targeted procurement interventions in the strategic arena.  In the strategic space there are two areas to consider.  The one is the Strategic Critical which we will discuss later and the other is the bottleneck domain.

Bottleneck

The Bottleneck arena has some of the most important suppliers to any company.  The risk here is around ‘surety of supply’ which is a critical risk to the company.  As the risk is to such a high degree this space would therefore not be the targeted procurement focus of the company.

Strategic Sourcing

The strategic sourcing arena normally is the core of the value chain, but this space also leans to significant spend/ volume and risk.  These are all reasons why access for small companies to the strategic sourcing arena would be difficult.  The way into this space would therefore normally be by building a relationship in the leveraged sourcing arena.  Entry into this space by a QSE/EME would encompass quite a strong hands on approach and all the approaches in this space is long term (Three to Five years) in nature.

The following are some Targeted Procurement initiatives for Black and Black Woman Owned QSE/EME companies that can take place here:

• Test strategy followed by high-growth intervention

The volume and amount of spend would still be high, but the smaller company would be afforded the ability to organically grow over a period of time.  This intervention could be combined with an unbundling of supply intervention which would make it easier for the company to access the volume that is required over a period of time.

Normally this intervention would have some type of test phase where the targeted company is provided with a chance to be successful while being closely managed and monitored by the buying company.

Seeing as this area is so closely aligned to the core activities of the company, the initial stages would be very hands-on by the buying company and would include internal resources from the buying company as well as possibly including external Business Development Support.  This intervention would therefore be strongly assisted by a focused project managed supplier development approach.  This approach would not be recommended if you do not have significant senior management buy-in.