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Strategic Sourcing Presentation For Wbec West Pp 2007 V2

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This is a copy of the presentation I did at the WBEC West Annual Meeting. The title was "Strategic Sourcing - So What? Now What?" It was about WBE\'s selling to companies that have supply ...

This is a copy of the presentation I did at the WBEC West Annual Meeting. The title was "Strategic Sourcing - So What? Now What?" It was about WBE\'s selling to companies that have supply chains

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    Strategic Sourcing Presentation For Wbec West Pp 2007 V2 Strategic Sourcing Presentation For Wbec West Pp 2007 V2 Presentation Transcript

    • Jeffrey W. (Jeff) Jones, Certified Professional Supplier Diversity™ 757-871-1711 jeffjoneswillspeak@gmail.com www.linkedin.com/in/jeffjonesinfoCONFIDENTIAL - CREATED BY JEFF JONES ALL RIGHTS RESERVED
    • So, I‟m sitting at the bar…….and believe it or not we want the same thing CONFIDENTIAL - CREATED BY JEFF JONES ALL RIGHTS RESERVED
    • SESSION OBJECTIVE:When the session is over the participant will:Know how to review a generic corporate commodity sourcing matrixMatching the Sourcing Matrix to the Sourcing ProcessUnderstand what steps you need to take after this session to better match your sales strategy with the sourcing strategy of your prospectsUnderstand how a company‟s income statement is a valuable tool for you to use in determining your sales strategyKnow how to get the most from your supply chain professional CONFIDENTIAL - CREATED BY JEFF JONES ALL RIGHTS RESERVED
    • SESSION GROUND RULESVery Interactive. I will ask and answer questions along the way.I will manage redundancy with the previous presentationWhat you will get today will help you strategize for the future but it will not answer all your questions today. CONFIDENTIAL - CREATED BY JEFF JONES ALL RIGHTS RESERVED
    • BUSINESS REALITIESWhat All Business Owners Want More Customers, More Revenue, More ProfitsThe Three Things You Can‟t Get More Customers, More Revenue, More ProfitsHere is what you can do: Increase your sales conversion rate, sell more to each customer and reduce your operating expenses.  In order to do this you have to find, get, and keep the right customers. Today we will talk about finding the right company to call on based on your core competencies and theirs. Then we will talk about how to really engage the supply professional. CONFIDENTIAL - CREATED BY JEFF JONES ALL RIGHTS RESERVED
    • THE PROBLEMThere is a mismatch between the target company‟s strategy to buy goods and services to produce what they sell to their customers and the products and services that the supplier wants to sell to the target company. This mismatch results in frustration, wasted time, wasted marketing and sales dollars spent by suppliers on the wrong target company and most importantly no sales for the selling supplier.The root cause of this is unfocused prospecting efforts. CONFIDENTIAL - CREATED BY JEFF JONES ALL RIGHTS RESERVED
    • THE SOLUTIONUsing the “Right Prospecting Plan” © that will efficiently guide you to finding, contracting with and keeping the right commercial customers using:1. The Prospects‟ Income Statement2. Knowledge of how commodities are prioritized by the income statement and strategic sourcing plans3. Knowledge of your core competencies and your prospects „ using NAICS codes4. An account entry strategy that is integrated with the sourcing strategy.5. Your supplier diversity contact to help you execute steps 1-4 CONFIDENTIAL - CREATED BY JEFF JONES ALL RIGHTS RESERVED
    • THE RIGHT PROSPECTING PLAN© How What do they Get Do You Sell Important is CreateID Target ID What buy in order Get Sourcing Commodity What they what you sell AccountCompany They Sell produce what Process Ranking if Buy? to the Entry Plan* they sell? available corporation? Income From SD Statement Your Sourcing Manager Internet SD NAICS Category Research Manager codes Matrix Use ToVarious NAICS Generic understand Lead Code Process importanceSources Listing “The Real and Ask of category Income Questions NAICS Statement • Direct ID SD Codes for Expense? Sourcing Manager what the Get Industry • Indirect Team buy contract Information Expense $value To Create an Account Entry Plan read “Selling to Big Companies” by Jill Konrath. (see resource page CONFIDENTIAL - CREATED BY JEFF JONES ALL RIGHTS RESERVED
    • Prospective Client NAICS Code for What Your Client SellsRoyal Bank of Paduka Ville 522, 523 , 524 NAICS Code for what Your Client BuysCommodityIT Hardware and Services 334111, 334210, 238210., 811212, 334112IT Software and Services 518210, 541511, 541519, 611420Network Technology 334210, 811212Telecom 334210, 811213, 283210, 517110, 517911, 517210 541720, 541910, 541614, 519130, 511120, 424920, 323119, 323113,Information Services 323111, 323110, 541910, 561450, 522310 541211, 541219, 921190, 524298, 541612, 523930, 541410, 541613,Consulting Services 541620, 541611, 522220, 52291, 541512, 56110, 541211, 541219, 561320, 561311, 561312, 541519, 541512,Staff Augmentation 541430, 525120, 541612, 524130, 525190, 813920, 525110, 238990, 484210,Benefits Service 813211, 624310, 523920, 521110, 522190, 522310, 524210, 812990, 561450, 523920, 523930, 522320, 541214, 522310, 541618, 523120, 523999, 52310,Financial Services 524113, 524114, 541310, 541320, 541330, 238290, 423420, 561611, 238290, 811310, 722320, 531312, 811310, 236220, 423430, 625111, 238220, 238390, 326191, 322998, 335121, 335122, 561720, 561730, 492110, 561431,Corporate Real Estate and Facilities Management 484210, 492110, 561910, 322121, 481111, 48112, 481211, 531120, 721110, 721120, 485310, 561510,Travel and Events 541810, 541860, 541430, 541910,541614, 323110, 323113, 323117,Marketing and Communications 323119, 51110, 541820, 561920, 531320, 531390, 541110, 425120, 531210, 238210, 238220, 238190, 238990, 541350, 524126, 561730, 531312, 531311, 541191Real Esate Owned Properties 522390, 522320, 423420, 32613, 424120, 561910, 561422, 522320, CONFIDENTIAL - CREATED BY JEFF JONES ALL RIGHTS RESERVEDSales and Sales Fulfillment
    • THE BEST PROSPECTING TOOL YOU WILL EVER FIND –ALMOST Sales Revenue Widgets Repair kits Service Total Sales Revenue Cost of Goods Sold/Cost of Service Sold Widgets Repair kits Service Marketing Technology Temp employees HR - People who deliver the service Raw Materials SalesFulfillme nt Costs Subcontractors Total COGS/COSS Operating Expenses General & Admi nistrative Bank Fees Subcontractors Insurance, Legal and Professional Services, Printing, postage, stationary Rent Utiliites Marketing Advertising Public Relations Sales Technology Property Expense Research & Developme nt Other Operating Expenses Total Operating Expenses CONFIDENTIAL - CREATED BY JEFF JONES ALL RIGHTS RESERVED
    • THE REAL INCOME STATEMENT© Direct Critical GeneralCustomer Sales Expense (COSS/COGS) Expense Expense Flow of Expenses Raw Material/Supplies ConsultingCustomer Marketing ServicesTypes Request Processing• Consumers Staff• Businesses Products built Sales People Augmentation• State, Local & to specs Sales Fed Gov’t Benefits Sales Fulfillment• Non-Profits Services Marketing & Communications Customer Financial Service/ Call Services Print & Publications CentersCritical Needs• Cost, Risk, Sp Technology Travel & Events eed, Quality, t IT Hardware & hat are Services Services Designed to Sales Locations Real Estate and socially Facilities responsible Specification Management Product Licensing Fees IT Software & Interest Expense Services Legal Services CONFIDENTIAL - CREATED BY JEFF JONES ALL RIGHTS RESERVED
    • BUYING STRATEGY VS. SALES STRATEGY Bottleneck Strategic/Critical/PartnershipHigh • Unique Specs • Continuous availability is essential • Supplier Technology Important • Custom design or unique specifications • Low demand and/or few sources of supply • Supplier technology is important • Substitution is difficult • Few suppliers with technical capability or capacity • Switching suppliers is difficult • Switching suppliers is difficult Risk of Supplier • Your Sales Strategy: Consultative • Your Sales Strategy: Enterprise Partnership Acquisition Commodity Categories Non-Critical Leverage • Standard specification or “commodity” type items • Standard specs or commodity items • Substitutes readily available. • Volume price breaks: price/unit is key • Many suppliers • Substitution is possible • Your Sales Strategy: Transactional adapt to highly • Several supply sources competitive, price sensitivity • Your Sales Strategy – Transactional and ConsultativeLow Low Value To The High Company Adapted from ISM Foundation of Supply Management Book 1. CONFIDENTIAL - CREATED BY JEFF JONES ALL RIGHTS RESERVED
    • GENERIC SOURCING PROCESS FROM ISM Find out when this process starts for Your best chance of the commodity you sell. Process success is getting in at theses steps normally runs from 6-9 months Conduct Develop Negotiate Conduct Collect Solicit with and Supplier Category Implements Internal Supplier Evaluate select Market Sourcing RecommendationsAssessment Info Bids suppliers Assessment Strategy Many businesses Every company will use some variation of this. Your job is to don’t find out what is find out from your supplier diversity contact what they use and going on until this where they introduce suppliers in the process step. By then it is too late. Adapted from ISM Foundation of Supply Management Book 1 CONFIDENTIAL - CREATED BY JEFF JONES ALL RIGHTS RESERVED
    • THE REAL INCOME STATEMENT© Direct Critical GeneralCustomer Sales Expense (COSS/COGS) Expense Expense Order of Supply Importance Raw Material/SuppliesCustomer Types Consulting Services Marketing• Consumers• Businesses Request Processing• State, Local & Fed Gov’t Staff Augmentation• Non-Profits Products built to Sales People specs Sales Sales Fulfillment Benefits Services Marketing & Communications Customer Financial Services Service/ Call Centers Print & PublicationsCritical Needs• Cost, Risk, Speed, Quality, that are Technology Travel & Events socially responsible IT Hardware & Services Services Designed to Sales Locations Corporate Real Estate Specification and Facilities Product Licensing Management Fees IT Software & Services Legal Services Interest Expense CONFIDENTIAL - CREATED BY JEFF JONES ALL RIGHTS RESERVED
    • HOW YOUR SUPPLY PROFESSIONAL CAN HELP YOUIdentify Sourcing Process and Strategy for your commodityPerform non-proprietary due diligenceFind out if there is a sales concentration % restrictionFind out if their company is a local, state or federal government contractorFind out if their company has customers that require they diversify their supply baseExplain how their supplier recruitment process worksFind out if they are part of a cross-functional strategy development teamFind out who the category leader is in the company for your commodity.Make focused introductionsUnderstanding of who owns the “business vs. who buys for the business”Provide guidance on expense NAICS CodesFind out what their company does with spend of less than their strategic sourcing threshold CONFIDENTIAL - CREATED BY JEFF JONES ALL RIGHTS RESERVED
    • RECOMMENDED RESOURCESBook: “Selling to Big Companies” by Jill Konrath. ISBN – 10 1419515624Institute for Supply Management www.ism.wsBook: “Tackling the Titans – How to Sell to the Fortune 500” by Julia E. Hubbel. ISBN-10 098286311xThe Supplier Diversity Manager for your target company.NAICS Codes: http://www.census.gov/eos/www/naics/Book: “Rethinking The Sales Force” by Neil Rackham and John R. DeVincentis. ISBN 978-0-07-137126-1 CONFIDENTIAL - CREATED BY JEFF JONES ALL RIGHTS RESERVED
    • RANDOM THOUGHTSCorporations only buy stuff because they sell stuffThe farther away your product or service is away from your prospects customer the less important your product is in terms of the commodity strategy the corporation will useThe closer your product or service is to your prospects customer the more rigor will be involved in selecting your product or service.Corporations that sell intangible products are really in the marketing and technology business and your sales climb will be much more steep.If you are in the same business as your prospect do you think they will ever admit you can do it better?What corporations mean when they say “you are too small” No corporation wants to be more than a certain % of your annual revenue. So, if there is an opportunity $1MM per year contracting opportunity and the corporation has a sales concentration limit of 25% then the supplier must have $4MM in annual salesIf you are not really proficient in a certain NAICS code don‟t pursue it with the corporation CONFIDENTIAL - CREATED BY JEFF JONES ALL RIGHTS RESERVED
    • YOUR SPEAKER Jeff Jones is a 30 year veteran of the financial services industry with specific documented expertise, responsibilities and successes in product, marketing, sales, fulfillment, opera tions, and supply chain integration using Six Sigma, consulting and project management disciplines. Jeff was part of Bank of America‟s award winning Supplier Diversity Program for 8 years and a key contributor to YOY spend increases and supplier growth. Jones – A Distinguished Toastmaster, and Certified Six Sigma Greenbelt – also holds the Certified Professional in Supplier Diversity ™ credentials from the Institute for Supplyjeffjoneswillspeak@gmail.com; www.jeffjonesinfo.com Management. www.linkedin.com/in/jeffjonesinfo CONFIDENTIAL - CREATED BY JEFF JONES ALL RIGHTS RESERVED
    • CONFIDENTIAL - CREATED BY JEFF JONES ALL RIGHTS RESERVED