1. When sourcing items that are manufactured using various raw materials, such as polymers/plastics, metals or ceramics, it is a good idea to breakout the material cost from the rest of the equation.  Having this information can be very useful in the future when a supplier asks you for a price increase to compensate for rises in the cost of the material.  You’ll know exactly what percentage of the unit price is based on the given material and can adjust properly for any increases or decreases in the market.
  2. Make sure to obtain a complete cost breakdown including Raw Material Cost, Manufactured Cost and Delivery Cost from your suppliers.  Having this information will allow you ask questions based on the variance in cost between suppliers.  The answers to these questions will help you determine which of the options below to use in your RFx.
  3. Don’t be afraid to think outside the box.  If you find that the market has a significant affect on your business, you may want to consider sourcing the raw material yourself.  Take a look at all the items your company as a whole purchases using that type of raw material and see if you can obtain a better price then your suppliers.  You may be surprised to find our how much buying power you actually have.
  4. Be sure to include Ariba Discovery into your Sourcing process. Identifying and adding additional suppliers to your events can not only make your event more competitive, but for each supplier you add, you can expect up to 1.5% savings!

 

 

Debbie Cook is a Customer Enablement Manager with Ariba. All customers are invited to join the private Customer Success group on Ariba Exchange, where you can access the Customer Success Spotlights, Lunch 'n Learn Webinar calendar and replays, and the Ariba Knowledge Nuggets.