Strategic Procurement focuses on identifying ideal supplier partnerships, adding value into each phase of the procurement process, and developing new strategies to find cost reductions. Data and feedback is obtained from customers about key suppliers and that information together with business analyses is incorporated throughout these activities.
The NSHE spends over $500 million each year on goods and services. Strategic sourcing is identifying suppliers that can provide the greatest strategic value and then negotiating system-wide contracts to improve the NSHE's spending habits. Economies of scale are used to obtain both hard-cost (dollars) and soft-cost (efficiency and ease of ordering) savings. These system-wide contracts streamline purchasing for customers and ensure competitive pricing. Through Strategic Sourcing, the NSHE’s acquiring of goods and services is more efficient and effective.
Supplier Relationship Management
Supplier relationship management is a robust program used to establish meaningful relationships with the NSHE’s most critical suppliers. Mutual goals promote value creation and the continuous improvement of the overall quality of delivered goods and services. These relationships are managed through regular business reviews, contract management, and frequent supplier contacts. This management ensures that suppliers are performing at optimal levels regarding pricing, customer service, and effective contract catalogs.
Spend management analysis creates a comprehensive understanding of where and how the NSHE spends its money. Designed to enhance budgeting and planning activities, this program provides more visibility and clearer understanding of spend, and leads to better procurement decision-making. A key goal of spend management is showing departments the value of using existing contracts as a primary means of obtaining goods and services. By reducing the time and effort spent shopping outside of NSHE contracts or making one-off procurement card purchases, the total cost of ownership is reduced.
Business analytics assists in supporting data-driven Strategic Sourcing, Spend Management, and Supplier Relationship Management. Business analytics includes collecting, analyzing, and categorizing NSHE spend data, spending habits, and business decisions. This type of data analysis allows for continuous improvement for all phases of the procure-to-pay process.