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The CPO's Corner
What if I have few supplier options in the travel space?
Many of us perceive that the ideal travel profile for a company is a combination of large spends, frequent trips, and location in a major metropolitan area where there are lots of suppliers vying for our business.
If your company’s location is such that there is a significant restriction on your ability to leverage across multiple travel providers, all is not lost. If you have limitations – and your suppliers know that as well – you can still optimize within those limitations by getting creative.
First of all, get to know the providers. If they are only game in town you must be allies. Be clear about your needs and don’t stop asking for the kinds of deals you’d like to see. You may not have leverage in the classic sense, but there is leverage beyond volume alone. For example, if your company allows you can offer to jointly present at conferences or be a reference for that supplier. The more you build the relationship, the more you may be able to achieve. Suppliers are continuously being evaluated as they bid on new business, and to the extent you can work together to build a “gold standard” relationship that they can talk about, you will be adding value.
Second, consider gamification. Get your employees involved in keeping travel costs low by setting standards for trips and rewarding employees for creativity (within limitations, of course) in coming in below that standard. For example, splitting the savings with the traveler if they take a lower cost flight or an alternative like the train. A firm that I know offers employees incentives for staying with relatives or friends on short trips instead of hotels. On other words, if you can’t get it on the provider side there may be opportunity by engaging your travelers.
Third, utilize technology to comparison shop and get the best deal for each individual trip, forgetting about trying to leverage in a big way and instead taking advantage of daily fluctuations.
So it requires creativity, personal attention, and maybe a modest technology investment but you can still make some great strides in bringing your travel program farther than it looks at first glance.
Joanna Martinez is a global procurement / supply chain leader and the founder of Supply Chain Advisors LLC. She is a frequent lecturer and blogger on procurement topics and also provides coaching, strategy development, training, and cost reduction opportunity assessment. Her clients range from Fortune 100 companies to technology startups.
As either regional or global CPO, Joanna has led transformation initiatives for companies in many different sectors: among them Johnson & Johnson (consumer products), Diageo (beverage), AllianceBernstein LP (financial services) and Cushman & Wakefield (real estate services, property management). She has also held client-facing roles, effectively giving her the opportunity to “sit on both sides of the table”.