I know this essayist Raj Sharma from his contribution to the October 2012 volume of Contract Management magazine, in which he made a good case for Supply Chain Management replacing Contract Management in the case of commercial purchase orders and other low-complexity buys. CM magazine is behind a paywall, but I Googled him and found some of his work from that same timeframe. This report of his says the Federal Government can save between $25 billion and $54 billion a year by changing the way it buys goods and services, as follows:
Estimate demand—know how much you need. So-called accurate-needs estimates help set budgets, predict required operational capacity, and provide suppliers accurate demand information that can improve government’s ability to negotiate better pricing.
Plan better, use less—separate what you need from what you want. The easiest way to reduce costs is often simply to consume less. That starts by tying every purchase requirement to an identified need, not merely a desire.
Buy commercial—buy what people are already selling. It’s almost always less expensive and less risky to buy an “off the shelf ” product than to commission a customized version. But it requires extensive research and discipline to stick to what the market offers.
Source strategically—coordinate and consolidate your purchases. Instead of purchasing something whenever a need arises, “strategic sourcing” means coordinating across offices and taking a step back to determine the best way to purchase a good or service on an ongoing basis.
Maximize competition—make it easy for vendors to save you money. Competition lowers costs, promotes innovation, and improves performance, so procurement officers should always strive to structure orders that attract multiple serious bidders.
Negotiate intelligently—know everything about your bidders. Smart buyers understand every aspect of cost for a product or service and arrive at the negotiation table armed with extensive knowledge of the bidders.
Simplify and automate—keep it simple, stupid. Procurement officials should eliminate bureaucratic hurdles that deter competition and they should automate processes wherever possible.
Manage supplier relationships—get what you paid for. The buzz phrase “supplier relationship management” refers to a conscious effort at proactively managing supplier performance and relationships across an organization. This improves management of suppliers across multiple contracts and gives buyers better insight into vendor operations.
Manage costs jointly—lower your supplier’s costs to lower your own. Working with suppliers to increase efficiencies and remove waste across the entire supply chain can ultimately reduce costs for government.
Manage internal and contract compliance—show me the money. When agencies don’t ensure cost-saving strategies are being used and suppliers are complying with contract terms, predicted savings can “leak” out. Compliance management requires an unrelenting focus on implementation to ensure “identified” savings become “real.”
These are many one-sentence ideas, each totaling up to a 7 on your scale. Maybe you can submit them all one by one.
The report is within a link here, for your perusal: A $400 Billion Opportunity - Center for American Progress
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