Welcome to the first in a series of Sourcing Specialist blog posts – where Alun Morris, Sourcing Consultant at Wax Digital, outlines the nuances and idiosyncrasies of the major indirect spend categories that are common to most organisations but often overlooked in terms of driving best value.

IT Consumables is often considered best bundled into office supplies as a category. But my view is that for best value to be achieved by any spender of note it is best approached as a category on its own. The market has many individual traits that can only really be leveraged when dealt with in isolation. The big one of these is the amount of continual price fluctuation that takes place on these global commodities, a result of constantly changing demand, manufacturing capacity and input prices.

Seemingly endless choices and options in the category means organisations must take care in boiling down to a tight shortlist and carefully vetted suppliers. I focus particularly on eSourcing tools, for example eAuctions, which helps to simplify this refining process across many variables to be explored. These include thing like the effect of splitting core and non-core items, as well as comparison of taking a single and multiple supplier approach across different product sets.

The level of variance in the category can be illustrated using printer consumables as an example. This sub-category alone offers options of OEM, compatible or remanufactured products. Beyond this the impact of how well different ink or toner products will work alongside selected IT hardware options is an important but difficult equation to determine total price per page and the value that different solutions offer.

Alongside the consumables market there is scope within most organisations to standardise their printer hardware at the same time. It can be highly effective to review these two categories side by side to consolidate budgets and drive the most desirable combined result from both. This cause and effect consideration is also important when evaluating remanufactured products – what does the recycling value of spent cartridges add to the picture?

Contrasting approaches must be considered for other IT consumables sub categories. Memory devices and storage media for example lend themselves to careful use of a range of tactics, such as standardising to a limited range, tendering bulk orders, ensuring demand management and considering grouping linked products.

In terms of frequency and regularity of review, the turbulence of price fluctuation in these markets means that regular careful review should be under way. What is a good deal one day might not be the next. Always keep a keen eye on market forces and use this knowledge as an ongoing negotiation tool.

Next week – IT hardware