Structured Procurement Strategies (SPS) have been used to deliver significant cost savings or benefits from the external supplier to business interface area.

The fundamental of this approach is the categorization of the total procurement activity into different management segments.

This is achieved by identifying the major spend categories of an organisation, analysing the procurement risks associated with the supplier and or market, assignment of them into an appropriate category and then generally following the category pre-defined procurement and relationship management strategies.

These category strategies are targeted towards the issues most important for the relative risk and market forces for that segment, and the magnitude of possible returns the organization could reasonably expect.

Decision about centralised/decentralised procurement, skill level of assignments can also be leveraged off this categorisation approach.

The use of Structured Procurement Strategies can deliver initial savings of well over 10% on the historical annual commodity expenditure, with savings in the ongoing commodity expenditure still possible at 7%+, even after several years of following this technique successfully.

Whilst identifying the annual expenditure is a relatively straight forward task, the development of risk rating criteria and the actual supplier/market assessment process requires considerable skill. ASL Management Services has an established method, which can be used to speed up the benefits capture in this area.

Further, the specification of the individual category strategies is a very important area, where the correct application of pre defined strategies can transfer considerable procurement experience into the organisations staff.