You will now identify high-level opportunities. This will be based on data gathered in the previous stages, which may be achieved with or without creating a new contract.
Strategic sourcing highlights opportunities in three key areas:
- Purchase Demand Management;
- Supply Base Management;
- Total Cost Management;
The above are portrayed as the three sides of the 'Best Value Triangle', which can be found at the bottom of the page.
Your commodity/service team should assess and highlight the potential opportunities on the triangle that could be further developed. The team should determine how they could be applied to the commodity/service in question. Risk should always be considered.
Your assessment of high-level opportunities should be carried out using the Sustainable Procurement Test, which can be found on the Sustainable Procurement Tools Platform.
The Best Value Triangle, available in both in graphic and table format, can be found at the bottom of the page.
You must also include any economic, social and environmental, and sustainability opportunities in your strategy e.g. include community benefits and Fair Work Practices.
This exercise should be proportionate to the complexity of your requirement. You are not expected to address every aspect of the best value triangle.
Are There Early Opportunities?
Early opportunities are defined as cost savings, sustainability opportunities or total cost improvements which:
- Can be implemented within 90 days;
- Provide benefits within six to twelve months;
- Have been considered as part of the Scottish Sustainable Procurement Prioritisation methodology;
- Are relatively easy and straightforward to do;
- Are often tactical and short-term in nature;
- Must support strategic plans.
There are many factors to consider for implementation of all opportunities as well as early opportunities:
- TIme-scales/implementation time;
- Complexity and how many other functions need to be involved;
- Number of geographical locations/business units involved;
- Specification changes required e.g. regulatory, safety, criticality, legal;
- Use of external technology;
- Acceptability to the customer;
- Business Unit readiness - 'pull';
- Supply market challenge;
- Skills & knowledge (existing and what is required for the future);
- Number of people involved in deployment;
- Clear decision owner(s);
- Results of the risk assessment.
The Opportunity Assessment Template is an aid to quantifying and prioritising the opportunities which will be included in the commodity strategy.