When to Outsource Your Purchasing Processes
Article 3 Sep. 2019

When to Outsource Your Purchasing Processes

When it comes to identifying new suppliers or strengthening strategic sourcing processes, many organizations express a need for enhanced expertise without having the freedom to increase their workforce. By outsourcing certain processes to a dedicated team, the company can refocus its efforts on priority subjects such as innovation, restructuring or even market reassessment.

1 / The Detection of Suppliers

Many Purchasing Departments do not devote sufficient resources and expertise to the detection of new qualified suppliers to ensure the exhaustiveness and robustness of their supply chain. Such detection can turn out to be time consuming, especially if the focus on the most promising areas is not well defined and documented initially. When Purchasing is challenged to meet production demands, the search for new ready-to-activate suppliers becomes a difficult and perilous task.

By using a macro study methodology, KEPLER limits the identification of regional suppliers to the countries most able to produce, in the target market, the requested category. By relying on Data and Benchmarks, it is possible to quickly end up with a shortlist and conduct an RFI, RFQ / RFP or an on-site qualification. Such a process, outsourced to an international team with resources available in the production areas, delivers maximum efficiency to the customer, allowing him to concentrate his efforts on the proper management of the production line.

2 / The Negotiation Phase

When it comes to managing suppliers, our clients often face the challenge of numbers, which does not allow them to establish constant contact with their entire base. By using a third party to analyze expenses, build a negotiation strategy and finally negotiate directly with some of them – the geographically distant, the carriers of technologies deemed “less priority” or those representing a marginal share of the mass Purchasing – the organization equips itself with the means to
quickly and systematically capture new sources of savings.

For one of its clients, KEPLER reviewed over $ 135M of expenses (Spend) from 154 suppliers in preparation for negotiations. For three months, the team designed toolkits and started negotiations with 87 of them, allowing the client to achieve 3% savings not previously identified.

3 / Strengthening an End-to-End Purchasing Process

Customer initiatives are often subject to a lack of resources. Adding internal skills is often impossible or irrelevant given the expertise required or the ad hoc nature of the need. Whether the task is urgent or there is no need to maintain over time, beyond a project, the new resources mobilized and the outsourcing of a cost-optimized process appears to be an ideal solution for strengthening purchasing skills. A reinforcement that can be done, from start to finish.

 

KEPLER trains mixed operational teams with local and offshore consultants (in India) to manage and execute its BPO offers. Thanks to its in-depth knowledge of Purchasing and the Supply Chain, the firm is able to manage processes efficiently and adapt its approach to the needs of the client, regardless of the maturity of the process.
As part of a new product launch, the outsourcing of end-to-end purchasing processes allowed our client to meet short production deadlines without supporting additional staff in the long term. Over a 10 month period, KEPLER negotiated and placed orders for over 1200 parts and $ 11M in expenses. By outsourcing the supply of parts of a wide variety and low complexity, the client was able to reduce its supply rate by 20% and focus its knowledge of the industry on strategic initiatives.

3 Examples of Secure and Efficient Procurement Outsourcing

Outsourcing is not just about additional resources. It is also and above all about efficiency!

Bring more added value with an experienced team and solid methodologies, deploy a flexible team fully aligned with the workload and planning of each initiative, optimize costs through offshore and low-cost professionals: so many assets enabling KEPLER to accelerate the achievement of customer objectives and to effectively complement the work of internal teams.