You and your team spend an enormous amount of time, resources and effort to negotiate good agreements for your organization. The problem is, soon after you’ve negotiated it, it’s no longer current.
Markets constantly change and pricing continuously fluctuates. While you’re looking for great pricing, what you really want to know is that you’re paying the true market price at any point in time. So how do you ensure that your pricing remains competitive?
Additional read: Optimize Your Supplier Relationship Management Strategy
There are many services that purport to providing price benchmarking services. The challenge with benchmarking services is that they can be expensive, and it is difficult to find apples-to-apples comparisons for your specifications. Three things can help conserve your budget and ensure that you are staying on top of your exact specifications:
- Run spot events. While you might not be able to run full events repeatedly, you can easily use a tool such as the Scanmarket eAuction module to quickly test the market for a particular set of specs. eAuctions are the most efficient way to run your price tests. One word of advice - make sure that you are awarding business to your bidders as part of this effort. Otherwise, bidders will become reluctant to participate.
- Stay on top of developments. Instead of relying on a price benchmarking service, take advantage of a host of free services. These could be category specific such as MetalMiner that provide deep intelligence, much of it for free. You can also use sources such as Scanmarket’s eAuction savings reports which highlight areas that are seeing particularly interesting activity at any one point in time. This can help you prioritize categories that are worth further study.
- Use templates. You have already put in all the work associated with the category. You have your stakeholder needs, demand information, specifications and supply market intelligence. Be sure to use all the information to your advantage. Even if it’s just publishing an RFI pricing update, you will be able to efficiently go to market to make sure you’re getting the right price.
Additional read: 5 Steps to Better Supplier Management
For more information on this or other ways to improve results from your strategic sourcing program, contact your Scanmarket account manager or join us at www.scanmarket.com.