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Times of traditional sourcing are gone

Procurement or sourcing is a profession, that achieved to "resist" changes for very long. But now also procurement undergoes systemic change, that started even before Covid-19 crisis.

Traditional sourcing approach, when the only procurement activity is running a RFP/RFQ and effort to negotiation lower prices, doesn't worl anymore.

On the one hand because the economy grew and the suppliers were not willing to discount much. On the other hand because costs of many suppliers grew and many couldn't afford to discount much. Covid-19 changed many things and the suppliers hard hit by crisis should be willing to concessions in order to keep the business. Yet, in the situation when they were hit heavily, they fight even harder.


Way out? a) reduce costs of procurement operations - increase efficiency, cut out low value processes (e.g. let internal user buy low spend) and focus and key spend b) transformational approach to procurement - change approach to what and how we buy; focus on specs and consumption, volume of purchased products and services; good procurement analytics

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