A first step in the process that’s often taken for granted is needs assessment and strategy development. During this phase we determine what the primary drivers and metrics for the initiative are. These can be as varied as ultimate cost savings or minimization of supply disruption, but are usually a combination of savings targets and risk mitigation.
To prevent supply disruption both valued incumbent vendors and possible alternates can be approached in order to define primary and secondary suppliers. We aim for a preferred supplier agreement at full annual volumes with SLAs, blanket orders, and quarterly releases or VMI agreements to maximize savings while ensuring consistency of supply.