Sourcing the Twelve Days of Christmas


12DaysOfChristmas.jpgOn the first day of Christmas my true love gave to me… a purchasing headache.

The Twelve Days of Christmas is an English Christmas carol, in which a series of increasingly grand gifts is given on each of the twelve days of Christmas.

As any “true love” knows, the Twelve Days of Christmas is always a nightmare for a professional buyer, says James Marland, Network Growth VP at SAP Business Networks, in December’s SmartProcurement.

As we work through the purchase requisition, already we see that the requestor has tried to combine two different commodities, when they obviously come from different suppliers. The Partridge and Pear Tree must be split into two separate lines.

A lotting strategy is needed to focus the spend on a smaller number of suppliers, and this would make sense to combine the avian line items into a single lot: Partridge, French Hens, Calling Birds and Turtle Doves. Combining lines into lots simplifies the purchasing process and encourages suppliers to compete aggressively. In addition, this gives a rare opportunity to use the first UNSPSC code 10 (“Live animals”).

The request for five Gold Rings is more problematic since the price of gold is likely to fluctuate over the period: so the supplier should consider index-linking their price to the London Metal Exchange spot price. The Swans and Geese should have performance-based contracts to hold the supplier accountable if they do not “a-lay”, or “a-swim” to the expected standard.

It is possible that the Ladies could also be encouraged to be Maids if sufficiently skilled labour could be sourced. It might be worth posting an RFP for Dairy Workers with appropriate Ballroom skills. The good news is that these enterprises are likely to be women-owned, so this will increase our supplier diversity.

A total of 21 Pipers and Drummers seems a little excessive. As purchasing agents know, requesters often have little idea of the quantities needed when a request is placed. We could suggest that a smaller number could be sourced initially, and the quantities increased later in the contract. Also, it is likely that the musicians will need to know more details from the requestor, so some form of on-line collaboration would be helpful here.

Twelve Lords-a-Leaping is probably the most challenging line item on this requisition. Lords can be sourced only from the UK, and are therefore subject to EU labour regulations regarding the amount of leaping allowed per week. In addition, with leaping not being covered by our workers compensation insurance, a review of the supplier’s safety certificate is suggested.

JamesMarland_Ariba.pngIf 2014 has many more purchase requisitions like this, then it is probably time to review some of the additional capabilities of Ariba such as supplier discovery, collaborative sourcing, performance management and services procurement.

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