Challenges in Strategic Sourcing
Challenges in Strategic Sourcing
Challenges in Strategic Sourcing
Einstein once said on the definition of Insanity: doing the same thing over
and over again and expecting different results.
In Supply Chain Management & Strategic Sourcing this could not be more
true. For far too many years the industries of the world have had somewhat
common practices for Cost Reductions, Vendor Selection, Evaluation and
Approval of Vendors and so on. However, the World and the industries have
changed so much in the last 20 years, just to pick up a date.
Some of the Industries Best Practices have been denominated a World Class
Operations/Practices, however, these tend to apply mainly to large
corporations that have unlimited resources both financially and of head
count. Where do all of all the companies that are not at that level stand?
What do they do in order to be successful?
In his Theory of Evolution, Charles Darwin mentioned that the fittest species
were the ones that adapted better to change. We can translate this to Supply
Chain Management: how does my company cope with an ever changing
world? How do we move from a locally sourced supply chain to an
International one, or go from an International one to a regional one? What
are the drivers?
The Market its a great starting point. What is your overall plan to satisfy your
customers? What gives you that competitive advantage above your
competitors and similar products/services? Is it Price? Availability? Turn
Around Time? Quality? All of the above? Most Executives will say "All of the
Above", but there is a price to pay to get everything your need at the right
time, in the right quantities and the perfect price. It is a very difficult juggling
act to accomplish.
Here is a list of elements to review by any Supply Chain Executive:
1.
5.
6.
7.
8.
that your company can be successful and they will also be successful. It
is a Win-Win approach and that is the only one that prevails time over
time.
9. Be an Enemy of the Status Quo: "We have done things like this
forever" is one of the worst answers in any industry. Maybe in has some
cultural significance to do things in a certain way. However, that
practice could have been successful 20 or even worse, 5 years ago.
Question if that is the right approach to manage your supply chain and
see if there is something you can benchmark either from your
competition or successful companies in other industries. That change in
the mindset of the operation can transform into a competitive
advantage. You have to be careful as not to portray a "Rogue Associate"
but rather an Agent of Change that will enhance your product, improve
the performance of your supply chain, but most importantly, make your
company prevail in a world that grows by the minute into a larger and
more complex Leviathan.
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