"AFSOC-onomics": Understanding the value of strategic sourcing Published Dec. 15, 2010 By Airman 1st Class Joe W. McFadden 1st Special Operations Wing Public Affairs HURLBURT FIELD, Fla. -- Air Force Special Operations Command is participating in the recently established Installation Acquisition Transformation Strategic Sourcing initiative, allowing committee members to measure current spending trends against best practices and to satisfy the expectations of a budget-conscious public. According to the Office of Management and Budget, strategic sourcing is the collaborative and structured process of critically analyzing an organization's spending patterns and using this information to make business decisions about acquiring commodities and services more efficiently and effectively. "This is no different than the way my wife and I try to run our home," said Craig Palmer, a contractor with Monterey Consultants, Inc., and AFSOC site lead for strategic sourcing. "We're looking for the best quality at the best price that we can spend, because those are my tax dollars as well as everyone else's." Ever mindful of the public trust, via taxpayer dollars, invested to them, AFSOC's leaders and personnel know how sound business decisions translate not only into adequate savings for the taxpayer but more effective, higher-quality tools for quiet professionals to keep the country safe. "That's essentially what strategic sourcing is," Mr. Palmer said. "But it's not only about cutting costs and saving money; it's also about protecting the country." As the subject matter expert on strategic sourcing, Mr. Palmer provides consulting services and training for the six step strategic sourcing model, developed through the University of Tennessee, about the Air Force's model for strategic sourcing. Through the model, Mr. Palmer helps AFSOC personnel utilize market intelligence and strategy development to identify potential cost or spending opportunities. Many of these opportunities are characterized by their high-dollar amount, increased volume of purchases, a large market of vendors or when the product's requirements are not standardized. Examples may include when a vendor is charging $1,000 for a product when another sells the same item for $100. "We are looking out for the low hanging fruit so we can identify targets and find efficiencies where we can save dollars and reduce human capital," Mr. Palmer said. "The bottom line is that we get the best products and services at the best price and leverage the enormous spend that we have." While emphasizing the value of smarter spending practices, Mr. Palmer also stressed how the costs of management and maintenance need to be taken into account, too. He likened the situation to a shopper at a case lot sale who might like to stock up and save money, although the hidden costs of storage and refrigeration are not always listed on the price tag. Mr. Palmer said the desired outcomes of the initiative would result in minimized prices and ownership costs, reduced transaction costs and improved product quality through leveraged buying power. But he did reiterate how strategic sourcing is a process and not a predefined result. "The end goal is for AFSOC to internalize and embrace the strategic sourcing model and that this becomes the new way of doing business," Mr. Palmer said. "If we can get everyone within the government, like contractors, civilians and military personnel, to personalize this, we can make our dollars stretch and get the best deal for the taxpayer." For more information about strategic sourcing, contact Mr. Palmer at 850-884-5999.