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Managing Indirect Spend: Enhancing Profitability Through Strategic Sourcing

ISBN: 978-0-470-88688-5
446 pages
November 2011
Managing Indirect Spend: Enhancing Profitability Through Strategic Sourcing (0470886889) cover image


Unique guidance for cutting costs regardless of economic conditions—without reducing headcounts

Successfully reduce costs in the area of indirect spend and watch your bottom line grow. Managing Indirect Spend provides you with the knowledge and tools necessary to get it done with an overview of: the challenges faced when sourcing indirect spend categories; strategic sourcing process; tools that can help drive savings, and examples based on real world experience. This how-to guide clearly covers specific sourcing engagements and provides the details needed to source effectively.

  • Includes sections covering the process, the tools, real-world examples, guidance through specific sourcing engagements and the information needed to source effectively
  • Presents guidance for achieving the object of strategic sourcing: cost reduction
  • Shows how effectively managing indirect costs can provide a huge impact on bottom line growth
  • Covers all areas of Market Intelligence (MI)

With tools, real world examples, and workable guidance, Managing Indirect Spend provides insider guidance for big bottom-line growth through effective management of indirect costs.

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Table of Contents

Preface xi

Acknowledgments xvii

Introduction: What Is Indirect Spend, and How Does One Manage It? 1


Chapter 1: An Introduction to Strategic Sourcing 9
Joe Payne

Chapter 2: Data Collection and Analysis 15
Joe Payne

Chapter 3: Conducting Research 47
Joe Payne

Chapter 4: The RFx Process 63
Kathleen Daly

Chapter 5: Scorecarding Suppliers 89
Kathleen Daly

Chapter 6: Negotiations 103
Joe Payne

Chapter 7: Get It in Writing 121
Joe Payne

Chapter 8: Implementation and Continuous Improvement 145
Joe Payne

Chapter 9: What Not to Do During a Strategic Sourcing Initiative 167
William Dorn


Chapter 10: The Importance of Market Intelligence 191
William Dorn

Chapter 11: Tools to Assist You in Gathering Data and Expediting the Sourcing Process 207
William Dorn

Chapter 12: Increasing Stakeholder Engagement 231
David Pastore


Chapter 13: Supplier Collaboration 245
William Dorn

Chapter 14: Leveraging Supplier Feedback 255
William Dorn

Chapter 15: Data Analysis 263
David Pastore


Chapter 16: Offi ce Supplies and the Sourcing Process 277
Jennifer Ulrich

Chapter 17: Negotiating Local and Long-Distance Telecommunications Services 299
David Pastore

Chapter 18: How Cell-Phone Management Drives Continuous Cost Savings 315
William Dorn

Chapter 19: Getting the Best Small Package Rates 339
William Dorn

Chapter 20: Making Sense of MRO Spend 355
Kathleen Daly

Chapter 21: Analyzing Shipping Costs 381
Joe Payne

Chapter 22: Sourcing Services 401
Jennifer Ulrich and Scott Decker

About the Authors 423

About the Contributors 425

Index 427

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Author Information

Joe Payne, Director of Strategic Sourcing, Source One Management Services, is an experienced consultant who has helped many companies reduce costs and manage change. He leads a team of project managers and analysts, developing insights into the challenges organizations face when undertaking initiatives to reduce costs in the area of indirect spend.

William R. Dorn, Jr., Director of Operations, Source One Management Services, is a certified Six Sigma Black Belt with extensive experience in large-scale projects for Fortune 500 companies and the federal government. His expertise includes business analysis; mechanical and manufacturing engineering; business process reengineering; risk analysis; and technology design, acquisition, and implementation.

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