We initiate the process by setting the stage for the upcoming sourcing project. It requires that we are open for innovative solutions without losing sight of the purpose. We are attentive to the purpose by being clear on the scope and objective of the sourcing project. Part of this process is also to find and set the right team of Arla employees for chasing the desired outcome of the sourcing project.
The next step is to take a closer look at the details and uncover the situation as it is. Through a fact-based working process, we aim for creating transparency within the sourcing category and identify cost saving opportunities for the entire life cycle of products and services. We send out Requests for Information to supplier candidates, which reveal the level of competency that can be expected from a potential supplier. This step allows us to set the spend baseline which is a key element for sending out Requests for Proposals later in the process.
To minimise the risk of untapped opportunities in the market, we analyse external forces that are influencing the sourcing category. We gather information about the market as well as important market players in order to determine the right sourcing strategy for the category and for Arla as a corporation. We constantly question ourselves and the way we act in order to improve and ensure profits to our farmers.
Sending out Requests for Proposals, analysing, evaluating and negotiating are all key aspects of strategic sourcing. We evaluate supplier candidates on multiple factors that cover everything from CSR to pricing, quality, service and supply capacities. Part of our evaluation criteria is also the supplier's ability to support the continual progress of Arla through business optimisation. Suppliers that deliver on these parameters will be part of contract negotiations. Once the contract is signed, the supplier will become a preferred supplier to Arla.
Once the contract is signed, we expect that our suppliers support us in making the implementation phase run as smoothly as possible. Pilot testing might be needed in order to optimise and ease this phase. Furthermore, implementing the contract gives us the opportunity to build on the supplier relationship and let it grow. Likewise, we maintain a solid relationship with existing stakeholders by carefully informing about how a newly signed contract might affect their daily work and what we in Procurement can do in order to ease the transition.
