Oracle Sourcing, a key component of Oracle Fusion Cloud Procurement, benefits suppliers and procurers alike by streamlining, standardizing, and automating the source-to-settle process

Overcoming challenges and improving outcomes 

Strategic sourcing is typically time-consuming and complex. Traditionally, few organizations had access to resources that allowed them to identify and exploit all available sourcing opportunities. 

That’s no longer the case. 

Oracle Sourcing is an enterprise application that makes it possible for you to drive more complete and more accurate sourcing through online collaboration and negotiation. As a key component of Oracle Advanced Procurement, its integrated suite can dramatically cut your supply management costs across the board.  

Oracle Sourcing succeeds by increasing the sourcing bandwidth of procurement professionals, so they can exploit many more savings opportunities and capture more value from each. Online collaboration and negotiation make it easy for experts from multiple organizations to exchange information, define requirements, conduct negotiation, and create new contracts. Oracle Sourcing allows buying professionals, business experts, and suppliers to easily collaborate and create agreements that provide the best terms for your organization. 
 

 

How it works 

When using Oracle Sourcing, your first step involves creating a “negotiation document” that specifies the details of your negotiations with potential suppliers.  

There are several ways you can create the negotiation document and several tools to help simplify the process. For example:  

• You can use a negotiation style to control the look of the document and the features available. This is a good way to create a streamlined negotiation.  

• You can use a negotiation template to create a base negotiation document containing much of the line and supplier-related information. Once you have a template defined, you can reuse it without having to reenter negotiation information. (You must have access to the Procurement Business Unit to use this template.)  
• You can also use requisitions in Purchasing to create a negotiation document. When you use this method, the requisition information is used to create the negotiation lines.  

Regardless of the option you choose, you can create a draft of your negotiation document while you work on it and save it in that format until it’s ready for publication.  

You then utilize Oracle Sourcing’s approval management system to track and manage approvals of the negotiation document, the negotiation award, or both. In this scenario, internal reviewers view and OK the details of the negotiation document and the final award decision.   

Your next step is to create a response document that captures all the supplier information you require to ensure a complete response. If you’d like, you can also assign a reference number to your response document to use for internal tracking.  

Choosing your negotiation 

Keep in mind, too, that you can create three different types of negotiations: a Request for Quotation (RFQ), a Request for Information (RFI), or an Auction.  

RFQ: An RFQ enables buyers to collect quotes from suppliers for complex and hard-to-define items or services, such as made-to-order manufacturing or construction projects. The RFQ process is generally the longest of the negotiation processes. Once suppliers have submitted an initial round of proposals (quotes), the buyer has the power to fine-tune the RFQ and initiate detailed negotiations, as necessary.  

This process may go through multiple rounds of negotiations and quotes. RFQs can be blind (the buyer can see the quotes during the RFQ, but suppliers cannot) or sealed (neither buyer nor suppliers can see the quotes until the RFQ is closed and the quotes are unsealed). In other words, suppliers can never see each other’s quotes while the negotiation is in progress.  

RFI: An RFI is used to qualify suppliers and their goods and services for subsequent procurement activities. RFIs are used more for gathering information on goods and service provided by a supplier than to lock price information. Therefore, RFIs typically do not refer to item price or quantity. RFIs identify important item criteria about which the buyer needs information. The supplier responds by answering the buyer’s questions. The buyer, in turn, uses supplier responses to identify the group of suppliers who should be included in the subsequent negotiation.  

RFIs are typically taken to multiple rounds until the buyer has enough information to identify the supplier(s) with whom to do business. At the conclusion of the RFI cycle, the information contained in the RFI can be copied into an RFQ or buyer’s auction. 

Auction: An auction allows buyers to solicit bids for goods and services that are clearly defined, such as office furniture and memory chips. Buyers can discover new suppliers or buyers and get competitive pricing or improved service. Buyers can tailor each auction to control who can see bids during the auction, whether multiple rounds of bidding are possible, and whether partial bids are allowed.   

Many different items can be included in an auction. If the buyer permits, suppliers can view all bids submitted while the auction is open. This information generates competition and encourages suppliers to submit their best possible price. Once the auction is completed, suppliers are immediately informed of the auction results via online notifications.  

Amending a negotiation 

After publishing a negotiation, you may need to update some of the information defined in the document. This update is called an amendment. Once you create and publish an amendment, respondents are notified that the sourcing document has been amended. They are then required to review and acknowledge the amended information and resubmit their response in accordance with the amendment. Amendments can be made any time after the negotiation has been published and before you close it.  

Approving awards 

Your Oracle Sourcing negotiation may leverage the approval management system to track and manage approvals of both your negotiation document and your award decisions. As previously noted, you can approve the negotiation document, the negotiation award, or both.    

Finalizing awards 

After entering and saving your award decisions, it’s time to complete the award. Completing the award process finalizes the award decisions. Once you take this step, you can’t change your award decisions.   

Yesterday’s tools are no longer up to the increasingly complex challenges associated with a procurement organization’s ongoing sourcing initiatives. Oracle Sourcing, on the other hand, is the one-stop-shop solution that delivers the framework, tools, and resources necessary for maximizing supplier negotiation outcomes. Contact Inspirage today to learn more. 
 

 

Inspirage can help

As the Integrated Supply Chain Specialists, with recognition from Gartner, IDC, and winners of Oracle’s ERPM (Enterprise Resource Planning & Management) & Supply Chain Management Cloud Partner of the Year (Global) awards in recent years, Inspirage is uniquely qualified to be your success partner. Whether you are upgrading your on-prem system or have decided to move to the cloud where continuous improvement is built-in, our team is prepared to guide you on your transformational journey. Contact Inspirage today to learn more about the role supplier consigned inventory can play in your organization.