15 Dec 15

Kick start 2016 savings

Kick start 2016 savings

2016 is almost here and lots of organisations and their procurement teams will be balancing priorities; between finalising 2016 budget plans and closing out savings and value delivery for the current year.

So, when time is running out and there are still gaps to fill – or perhaps where the opportunity exists to over-deliver and provide the company with extra fuel for next year’s plan; which levers can procurement pull rapidly and effectively to bring additional value?

Within category management and sourcing there are plenty of tools available to help uncover areas of quick win opportunities, often these can be overlooked and seen as requiring too much time, resource or process to execute. This does not have to be case at all. For example running or reviewing a spend analysis with a focus on ‘tail’ spend could yield actionable insights, such as services which are duplicated or being sourced outside of core contractual terms already in place. Alternatively, charge category managers to work with their business stakeholders to re-visit category plans, and focus hard on those opportunities already identified but seen as lower priority than long term strategic initiatives. Running this exercise with real drive and impetus to uncover and deliver value right now challenges previous conclusions and may well re-ignite ‘dormant’ projects.

Finally, how can you reduce costs rapidly without damaging supplier relationships? It can be easier to deliver these cost-out opportunities working collaboratively with suppliers, without risk of damaging underlying relationships. The best suppliers generally maintain a really good overview of improvement ideas, executable across short, medium and long term horizons; which they believe could deliver real value to their business and yours – leverage that! Approaching these challenges together, either through existing SRM governance channels or by creating an immediate ‘burning platform’ will provide a fresh perspective on where value can be unlocked, when and how.

So, to re-cap, here are some top tips for rapid savings success…


  • Turn over lots of stones – use analytical techniques to find quick win opportunities in areas which haven’t been reviewed for a while
  • Engage the team and use the tools– category strategies may be built with long term prospecting in mind, but there’s usually some immediate options which could deliver benefits now
  • Don’t compromise supplier relationships – conduct analysis and execute your initiatives in collaboration with your key suppliers
  • Keep next year in mind, and start early if you can – having a robust pipeline of initiatives and kicking off some activity now will underpin your 2016 numbers

Chris Thomson is Executive Consultant & Head of Strategic Sourcing at State of Flux, he can be contacted at email chris.thomson@stateofflux.co.uk or telephone +44 2078 420600.