Tips to establishing an international procurement office
Accenture provides guidance for global sourcing
By Purchasing Staff -- Purchasing, 8/13/2009 2:00:00 AM
Accenture recently provided Purchasing with a useful list of tips for establishing a successful international procurement office and low-cost country sourcing program.
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Set clear cost reduction targets across global procurement functions (with low-cost country sourcing as one savings lever) that are closely monitored.
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Be pragmatic, start small, find scalable opportunities and build. Focus on execution to bring value and benefits quickly; perfect processes can come later.
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Select initial categories that are relatively easy to source with greater potential savings benefit.
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Employ people on the ground with understanding of local language and practices.
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Gather market intelligence from global industry partners with an established, local presence in the country.
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Establish the process to build trust with potential suppliers (e.g., face-to-face meetings and visits).
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Be patient; decision-making can be slower in overseas markets.
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Anticipate possible misunderstandings during the RFI and RFQ process. Use straightforward easy-to-understand English and clearly designed and unambiguous RFx templates.
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Guarantee a business case (total cost of ownership) approach.
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Conduct deeper qualification, audit and inspection of suppliers and their sub-suppliers.
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Mandate support of in-house purchasing and technical professionals to secure adequate sourcing demand.
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Effectively communicate and educate suppliers about requirements (e.g. common understanding of quality and testing requirements, price-indexing for long-term framework agreements).
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Deploy resources to low-cost countries who are well connected with their company's global procurement operations and have a good network of internal procurement contacts.
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Bring global quality and engineering staff to visit low-cost country suppliers regularly and let them see these suppliers' capabilities first-hand.
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