In Procurement, when given a project, we need to have clearly defined with our managers, the budget holders and the stakeholders, what our outcomes need to be. For example, is it cost down, is it smaller and more robust supply chain, is it reducing inventory, is it futurizing the organizational requirements, is it benchmarking the current supplier against the market, all of the above, etc? The answer will lead us to the decision : RFP process or Tactical Negotiation process or a hybrid of the two.
The RFP can be a lengthy and involved process and may not be required. If Procurement does go through a RFP process it should be to change the strategic landscape of what is procured. I would not recommend that this exercise should be used to obtain a reduction in “like-for-like” goods. A like-for like/cost down exercise should be a Tactical exercise and not a Strategic exercise. If you run a full RFP process for replacing “like-for-like” then you are wasting your and your company’s time and resources. Therefore, defining and agreeing the outcomes before taking action whether Tactical or Strategic, will help to save time, frustration (stakeholders) and cost.
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