7 Procurement Levers - oboloo (2024)

FAQs

What are the 7 levers of procurement? ›

The seven levers are: strategic sourcing, supplier relationship management, category management, procurement process optimization, supplier performance management, contract management, and e-procurement.

Procurement levers are the set of actions that enable the procurement function to balance multiple, seemingly contradictory targets. These levers can be based on price, total cost, demand and supply. Organizations must invest in technology and automation to optimally leverage these value levers.

Negotiation levers can include various facets of a contract, including cost, lead time, quality of service, and the basic demands for the product being procured.

Sourcing levers describe tactics to achieve sourcing targets for diverse categories of materials or services. However, relevant research has been prevented inasmuch as the sourcing lever concept lacks explicit conceptualisation and a method of measurement.

So, what are the 7 Rs? The Chartered Institute of Logistics & Transport UK (2019) defines them as: Getting the Right product, in the Right quantity, in the Right condition, at the Right place, at the Right time, to the Right customer, at the Right price.

Public procurement is a process through which government buys goods and services from private businesses. The seven core principles of public procurement are open and transparent bidding, fairness, integrity, efficiency, good governance, partnership, and human rights.

Value levers are the actions that a company can take to influence its value drivers, such as increasing sales, reducing costs, improving efficiency, investing in innovation, or managing risk.

The three C's in procurement and savings tracking are Control, Consolidation, and Cost Savings. These elements are essential for optimizing procurement processes, managing resources efficiently, and achieving cost savings.

What are the 7 stages of negotiation in procurement? ›

Most people know intuitively that if they are to be convincing, they need to be confident, and if they are to be confident, they need to be comfortable (comfortable, confident, and convincing are what I term the three C's of negotiation).

The 4 C negotiation strategy is an approach that aims to create a solid and lasting customer relationship while maximizing the results of a commercial negotiation. This method is based on four essential pillars to conduct an effective negotiation: Contact, Know, Convince, Conclude.

Strategic Sourcing is the process of determining an organization's spend profile and supplier base to ensure that the organization's procurement needs are met effectively and profitably. It involves connecting data, spend analysis, market research, negotiation, and contracting to achieve maximum business performance.

Put simply, value levers are a set of actions that enable procurement to achieve its many goals (e.g. managing cost and risk, meeting socioeconomic targets) while fulfilling the needs of the mission.

Understanding levers

Imagine you walk into a negotiation room and instead of people you find several mechanical levers on the wall. Each lever is labelled with central pillars such as cost, quality, delivery, service, as well as others relevant to the particular good or service you are procuring.

Abstract: Sourcing levers describe tactics to achieve sourcing targets for diverse categories of materials or services.

What are the 6 Rs in procurement? ›

Right Time 4. Right Source 5. Right Price and 6. Right Place.