3 steps to achieving sourcing success

3 steps to achieving sourcing success

Discover how one of the world’s leading leisure and travel groups was able to travel to the next level of spend management and achieve seven figure savings by streamlining its sourcing processes and management of supplier relationships across Europe.

Many procurement departments are often faced with repetitive and inefficient sourcing processes that are error-prone and time-consuming, and it’s mostly down to the fact they’re not using any of the latest centralised online technology and tools. And with inefficient manual sourcing processes comes a risk of losing out on potential savings, simply because the department is not able to fully track all the sourcing activities that are taking place outside of their own team. As a result, they’re are powerless to identify where the organisation could drive further efficiency and cost savings.

And when procurement departments are running tenders and auctions, or are on-boarding suppliers without any systems to help, they’re relying on manual input to manage everything from setting up the forms to collating the question responses and compiling the supplier’s information. Thomas Cook, one of our customers at Wax Digital, was facing a similar challenge, with the business relying on both decentralised and non-automated sourcing activities.

Thomas Cook came to us with a brief to run faster and more efficient auctions and tenders whilst improving supplier on-boarding processes and driving cost savings across the group, and the results were very much “on brief”!

So, in this blog, we’ve listed 3 key steps Thomas Cook took with us to help streamline its sourcing processes:

With Thomas Cook’s procurement team running tenders across different European sites, it was keen to drive transparency of this tendering activity across the group. The business also wanted to try and streamline and automate the tendering initiatives it was undertaking.

To adopt best practice, and drive significant time and efficiency savings, Thomas Cook shifted the entire tendering process online, allowing users to easily create, store and run multiple tenders via a single platform. The process to create an Invitation to Tender (ITT), a Request for Information (RFI) or a Request for Pricing (RFP) was simplified, delivering significant time and efficiency savings.

With data relating to all tenders being submitted online by suppliers, it meant the system was able to automatically score, weight and evaluate the supplier response with minimum input required from the procurement team. Using eTendering helped automate several parts of the tender process whilst providing transparency of tendering initiatives across the rest of the group.

Step 2: Running auctions electronically

Whilst running online tenders drives efficiency and saves time, a key foundation of good sourcing practice is to run auctions and negotiate competitive prices in the range of spend categories that lend themselves to a price bidding process. However, with manually run processes it is quite common for the buying organisations to be agreeing final offers with suppliers via phone or email towards the end of the process. This of course is fraught with opacity and subsequent accountability issues with no audit trail on why a supplier was eventually selected, if the more cost effective option was selected, and under what terms the pricing was agreed.

When procurement teams use eAuction tools they can enable suppliers to bid against each other in a live real-time transparent environment, giving the buying organisation 100% transparency on the process, and of course driving the best available cost savings.

Thomas Cook wanted to drive savings across some of its core spend categories by taking advantage of electronic auctions (which is available as part of our web3 Source to Contract software). Users were able to run auctions quickly across a range of spend categories including furniture, stationery, IT and professional services. By allowing its suppliers to compete against one other through live auctions the business was able to benefit from a seven-figure saving.

Step 3: Empowering suppliers to on-board faster

Most large buying organisations rely on hundreds, if not thousands, of suppliers to support their business operations, and are continually expanding the supply chain by adding new suppliers as products, services and business geographies expand. As a business with a growing footprint across Europe it was imperative for Thomas Cook to improve how they were on-boarding new suppliers, with speed top of the agenda.

In order to on-board suppliers faster, Thomas Cook introduced online Supplier Registrations Forms (SRFs) that were able to capture core information relating to the supplier, such as Health and Safety accreditations, core financial information, risk metrics and insurance certificates. Internal administrators had the flexibility to tailor the SRF forms based on the supplier and type of information they wanted to capture, putting the onus on the supplier to provide the required information.

This helped drive staff productivity benefits with the procurement team only being required to set-up the form, or use an existing template, and then approve the information provided by suppliers at different stages, as opposed to internal users manually chasing suppliers for pieces of information.

By enabling suppliers to on-board electronically it helped Thomas Cook save those precious commodities of time and money, whilst providing complete supplier information transparency of all suppliers across the group.

Read more about ‘Thomas Cook travels to next level of supplier Management with Wax Digital’ Or you can email or call us on +44 (0)333 323 3755, and we would happy to speak to you.