Procurement in Practice: Strategic Sourcing & Cost Analysis

We'll review a few helpful definitions of Agile to avoid an ambiguous or unclear understanding of this methodology.

We will exercise in qualifying typical procurement processes and artifacts for being Agile or not.

We will review critical differences between the Legacy (Waterfall) and Agile project implementation to understand the cultural shift in approach to value delivery.

With the help of simple mathematics, we will prove that the true cost of Agile procurement constitutes 3% - 34% of the lifetime revenue of a product.

We will analyze a case of a SaaS app to calculate the revenue loss due to 3-month RFP and compare it with the procurement savings.

We'll recall the Iron Triangle of Project Management and use it to explain the differences between Agile and legacy (Waterfall) projects.

This lecture will propose a realistic view of Agile supplier selection.

We will apply the Agile supplier selection process in the context of office renovation.

We'll propose how to negotiate fixed-scope projects using the value-centric approach.

Integrative negotiations promote values of trust and collaboration, while distributive ones assume that one party will take over.

We'll define Reverse Marketing and compare it with the traditional Buy-Sell approach.

We propose another memorable presentation of the differences between Strategic Procurement and Purchasing.

We'll test your procurement profile based on a practical case of IPad purchase requisition.

We will review all stages of procurement cost evolution and the factors influencing it.

Follow the link in Resources to learn more about Transaction Cost Economics and its impact on Make-or-Buy decisions. Then assess sourcing readiness using an online tool.

We'll explain the benefits of the Sourcing Strategy and its critical contents. A sourcing strategy template is attached to this lecture.

This sourcing strategy tool only requires you to fill in the online form with test case data.

Once you complete and submit the form, you will receive the personalized sourcing strategy in less than 2 minutes.

We'll map procurement's journey in the last decade by evolving from simple cost-cutting to complex value delivery.

Procurement's supplier selection process evolved from the lowest bid to a value-based approach.

We'll discuss the practical case of the TCO of IPad delivery.

We'll conduct another exercise to understand the differences between the lowest bid, TCO, and Value-Based supplier selection.

We will justify a choice of a newer and more expensive model of an air-conditioner with the help of TCO and value-based procurement.

We will use the NPV approach to prepare for negotiations with the supplier of air conditioners from the previous exercise.

We'll apply the variety of sourcing levers to negotiating the corporate mobile communication agreement.

We'll review different layers of spend.

We'll conduct an exercise to study ways of providing long-lasting value output in procurement.

You only need to fill out the web form for any procurement category of spend, real or imaginary.

Then you will receive the Kraljic Matrix analysis in real time (after 30-45 sec to process your data).

We'll study the notions of tail spend and buying channels.

We will propose an example of translating the PO spend analysis into a simple category strategy.

We'll study the taxonomy of buying channels.

We'll review a typical buying channel framework you may use in a category strategy.

We'll try to analyze the spend profile to come up with improvement ideas.

Lean Manufacturing provided a valuable tool to optimize governance and business processes - Value Stream Mapping. We'll conduct an exercise to test this tool on construction tenders.

Annual Procurement Plan Automation - Online Demo Solution.

This section contains the slide deck copy for this course.