Do I source or renegotiate?

Ashokk N Menon
November 14, 2023

"We'll stick to what we've always done and either renegotiate or source."

It's a global expert, giving the"facts of life" to an up-and-coming category manager who dared to ask a big question.

And I've heard it time and again during internal discovery sessions with category leaders...

"Source or renegotiate!"

And sure, either option is open, but what about when the...

- supply market is consolidated

- supply relationship cuts across multiple categories

- supplier is developing a niche offering that can prove strategic in the long run

- supply relationship is the market differentiator

You get the drift...So maybe rather than asking "Source or renegotiate?"...

Ask what drives value for both parties.

Reframe the conversation.

It's not about "winning" the engagement.

It's about the relationship, and about using any available levers to drive value for all involved.

So, despite the expert's advice, the category manager looked beyond "source or renegotiate," and focussed on the relationship instead.

Not only did they achieve the "savings”, but they found a way to increase revenue.

The approach became "better practice."

About the Author
Ashokk N Menon

For more than 20 years, Ashok has led procurement both in industry and as a consultant. In executing over 100 projects for global brands, he discovered a passion for developing the talents of people early in their procurement careers and unlocking significant benefits for companies and executives