Route 3 - Develop Strategy - Initial Opportunity Assessment
The objective of this stage is to identify high-level opportunities based on the data gathered in the previous stages which may be achieved with or without the creation of a 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'. For each of the potential opportunities on the triangle, the commodity/service team should assess and highlight those opportunities that could be exploited and determine how they could be applied to the commodity/service in question, bearing in mind any risk assessment considerations.
The assessment of high-level opportunities should be carried out in conjunction with the Sustainable Procurement Test previously identified for the requirement.
A Blank Best Value Triangle document is provided for your use. Alternatively you may wish to use the tabled version of the triangle. Sustainability Opportunities and the scope to include community benefits and fair working practices must also be captured for inclusion in your strategy.
This exercise should be proportionate to the complexity of your requirement and you are not always expected to address every aspect of the best value triangle.
Checkpoint - are there early opportunities?
Early Opportunities are defined as cost savings, sustainability opportunities or total cost improvements which:
- Can be implemented within 90 days
- Realise the 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 and must support strategic plans
There are many factors to consider for implementation of all opportunities as well as early opportunities:
- Time to deployment
- Cross-functional complexity
- Number of geographical locations/business units involved
- Regulatory, safety, criticality, legal, specification changes
- Use of external technology
- Acceptability to the customer
- Business Unit readiness - 'pull'
- Supply market challenge
- Skills & knowledge
- Number of people involved in deployment
- Clear decision owner(s)
- Results of the risk assessment