MMT Chats: Supply Chain Management and Procurement Solutions for the Small Shop

For this quick MMT Chat, I virtually sit down with two of the three founders of The Sourcing Guys and learn all about expert procurement, strategic sourcing, and supply chain advisement. My guests are Jimmy Young in charge of operations and Caleb Holdeman who manages marketing and process optimization.  Here is the transcript from my brief interview. Click above to listen to our 10-minute conversation.

 

What is the vision statement for The Sourcing Guys?

The Sourcing Guys are here to provide consulting or outsourcing services within the Sourcing/Procurement process. We can help anywhere in the value chain of this process. From finding the source all the way to making sure your materials arrive at the required destination.

What was the motivation for launching The Sourcing Guys this year amidst COVID-19?   

The three of us have a passion for making business run efficiently and for the least cost possible.  We get excited saving business money as if it were our own money.   We all had similar roles at our prior and current companies which provided us the opportunity to accomplish the items mentioned above. 

The idea was discussed for over a year but did not come to light until Covid-19 made us start producing back up plans when our employer announced involuntary layoffs.   In the end, two of us were impacted and we instantly began launching our business idea by implementing the major components and meeting with valuable business resources.

We are all aligned. We would much rather take our experiences and knowledge to apply our passion to small businesses.  We have saved millions for fortune 200 companies, so we know we can be a valuable source to our community, state, and beyond by saving money for small businesses allowing them to grow per their business plan. 

Break down the services you provide and also share what you don’t provide.

Our main purpose is to provide services and support to small businesses in any way possible. Although our main focus is centered around supply chain management and procurement, we can provide additional support in areas such as bookkeeping and operations. The main services that we currently advertise are RFP management, procurement/supply chain outsourcing, and procurement/supply chain consulting.,

Why do you provide this menu of services?

Each of us has spent years working for small businesses and the mentality for many of those organizations in their purchasing department  is “this is how we have always done it.”

I, personally, have been at places where I followed the “this is how we have always done it” mentality and then searched outside that little world and have saved the company over 50% on parts and services.

This is where our RFP management service can provide small businesses exponential value.  Additionally, we also know that many other inefficiencies can come along with the  “this is how we have always done it” mentality. This led us to add Outsourcing and Consulting options.  Many operations in these smaller organizations are completed manually. We have the tools and the “know-how” to solve this problem and increase the efficiency of these processes. 

Now maybe a company isn’t ready to let these processes be managed by an external organization, this is where the consulting can come into play. We will come into the organization, streamline the processes, and increase the efficiencies of these time consuming, mundane tasks and customize them to your company’s needs.

If the business is ready to relinquish these responsibilities, we would be able to take these responsibilities off of their plate while being able to provide them significant savings in overhead including over a 50% savings on the payroll.

Give examples and share common pitfalls shops make and/or things they overlook, which can be solved with the right sourcing solutions?

 

One of the most common pitfalls that we have seen among the organizations that we have helped and worked for are they do not use analytics, thus have no data backing the price that they should actually be paying for their products and services. 

Another pitfall is going back to the “this is how we have always done it” mentality.  Although it is important to maintain loyalty among your business partners, it is also important to make sure you are getting a fair price. It is important that your organization is also maintaining its profitability and competitiveness.

A third pitfall is continuous improvement.  Many small businesses think that they cannot afford to increase their efficiencies, because it is going to cost them tens of thousands, if not hundreds of thousands of dollars.  With our services, this is simply not true. 

Our outsourcing option guarantees a 50% cost savings compared to hiring an additional employee and our consulting option provides a valuable alternative to increase efficiencies throughout your organization starting at less than $1000 per project.

Data matters a lot these days, so let’s talk about the results.  Share a couple of cast studies to demonstrate what you can do and how you want to provide that to the small, mid-size manufacture who may be struggling with adapting, managing disruptions, staying competitive, etc.

One example would be working with a client who purchased many different SKUs of raw material at many different MOQs.  We conducted a full analysis on their volumes by SKUs and determined many SKUs warranted an increase in MOQ based on buy volume for the year.

This opportunity allowed us to work with the suppliers to quote new MOQs to deliver savings for the client. Specifically, moving from less than truckload purchases to full truckload purchases which resulted in 6 figure savings.

A second example is having an understanding of the total landed cost and analytics behind the parts that you are purchasing. Oftentimes organizations will look at piece prices and make a decision based solely on that information.  We have created automated total landed cost models and analytical tools for companies in the past that show all of the costs that go into our direct spend.

We will be able to develop these tools to cater to your company’s needs as well. These tools will show the whole picture, not just that high-level piece price. The tools will allow you to do a deep dive into your data to realize that you may not only need help with your sourcing geographically, but your supplier may also be charging you too much for material, labor, or profit.

How do you value relationships and how do you build trust with customers.

For us, relationships and trust are the most important part of what we accomplished in our past and what will be necessary to allow us to help and support small business owners.  We intend and will treat their business as our own and the actual business owners will dictate their needs to us so we can accommodate them.

We built our chemistry and passions through years of working closely in the same procurement organization at prior companies.   We spent lunch together daily, family time, personal time, and joined the same company functions including sports.  We have unique chemistry and understanding that allows us to operate 24/7 without the pressure of just being business partners.

We all three have our niche and talents that all combine for the success of the company.  There is not anything that we can’t relate to within a business to create success between the three of us.  Our backgrounds are diverse and we will feed off each other to apply to our communications with small business owners.

Due to our global experience speaking to numerous countries and many manufacturing companies across the U.S. through online meetings due to COVID, we have the ability to communicate effectively and efficiently with all business partners until we can have the necessary face to face.  We feel that face to face communication is the best way to face meetings.

In the end, today’s business world relies heavily on technology for communication but regardless of how high-tech things go in the future, we will always be a face to face relationship-based company and make our customers feel like they are the only customer we have which is to apply all our skills, knowledge and results to make them successful and grow their business.