Strategic Sourcing

  • ESG uses a proven, multi-step sourcing process to help our clients reduce operating expenses, increase participation levels of Small businesses and local suppliers. improve operational efficiencies, and mitigate risks.
  • ESG has delivered average savings of 23% to customers across a wide range of categories and verticals.
  • Our sourcing strategy uses a combination of techniques and tools that go far beyond unit price reduction:

    • Spend Consolidation

    • Product Rationalization

    • Category Management

    • Supplier Qualification

    • Supplier Relationship Management

    • Continuous Process Improvement

  • MBE Certified (National Minority Supplier Development Council)

ESG’S STRATEGIC SOURCING PROCESS

Develop Category Profile

  • Identify service level

  • Research market data

  • Identify and quantify spend data

Assess Opportunity

  • Profile purchaser and suppliers

  • Review contracts/service level agreement

  • Create assessment of opportunity

Develop Sourcing Strategy & Plan

  • Define sourcing strategy statement

  • Detail elements of the sourcing plan

  • Obtain buy-in as necessary

Request Proposals

  • Define decision criteria for award creation decision

  • Create RFP/RFI/RFQ

  • Invite supplier event submittals

  • Evaluate proposals

  • Create negotiations plan

Negotiate Agreements

  • Define negotiation approach

  • Prioritize points of negotiation

  • Refine negotiation plan

  • Define negotiation parameters

  • Confirm buy-in as necessary

  • Conduct negotiations

Select Supplier

  • Analyze/compare supplier responses

  • Identify preferred solutions and gain buy-in

  • Secure appropriate approvals

  • Measure supplier outcomes and debrief as necessary

BENEFITS OF STRATEGIC SOURCING:

– Cost Savings:

Reducing costs is always a top priority for procurement teams. A recent Deloitte survey reports that reducing costs is a top priority for 76% of chief procurement officers (CPOs). Accordingly, cost savings is easily the biggest benefit of strategic sourcing.

– Reduced Risk:

At its core, strategic sourcing is just as much about avoiding a bad partnership as it is about finding a good vendor. The same Deloitte survey indicates that 75% of CPOs identify improved vendor information sharing as their top risk-management strategy.

With ESG’s detailed process you can consider every factor, dig into the vendor’s experience, explore their contingency plans and set a framework for ongoing communication.

Source: 2021 Global Chief Procurement Officer (CPO) Survey, Deloitte

“[The ESG team] were instrumental in creating an effective strategy for managing our third party expenditures in a cost effective manner during a very tumultuous time for our bank. They have positioned us to reduce operating expenses, improve supplier performance and manage our supplier relationships with confidence.”

—Chief Financial Officer