Managed Sourcing
Summary of Benefits
All the benefits of Direct Sourcing apply to Managed Sourcing with the following additions:
- Constant drive for cost reduction and cost containment
- Variable term, according to Client requirement
- Additional dedicated resource, allowing your existing team to focus on core strategic sourcing
- Enables or compensates for headcount reduction
- Allows for strategic purchasing practice
- Gainshare based on net savings over the contract period
Managed Sourcing - in detail
Managed Sourcing offers a longer term purchasing solution with guaranteed savings.
As with Direct Sourcing, Managed Sourcing gives you the final word in the precise technical and commercial specifications of the products and services you require. We use our knowledge of supply markets and supply chain to source on your behalf and proceed to make our recommendations to you. We will then support implementation of our recommendations into your business and (this is where Managed Sourcing differs from Direct Sourcing) continue to manage the ongoing commercial relationship with the supplier/s over the contract term.
Typically, Managed Sourcing is contracted over a three-year period; however, the contract period is variable, according to your specific requirements. Over this period we can take our fee as a percentage of the net savings we deliver to you. This provides the opportunity for managed cost-reduction over the longer period whilst also enabling us to mitigate price increases in the form of cost containment. Again, our fees can be levied only after you have benefited from the saving, thereby keeping the programme self-financed throughout the life of the contract.
Managed Sourcing is a valuable business tool that has a number of other benefits including enabling or compensating for headcount reduction. By outsourcing your purchasing activity you continue to provide your organisation with the skills and support it needs, but at a reduced cost which is guaranteed and set over a given period of time.
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