Sourcing & Procurement News — January, 2009

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Low-Cost Country Sourcing Remains Cost-Effective
Despite recent interest in 'near-shoring' key sourcing categories, interest will continue in low cost country sourcing in 2009 as US and European businesses seek out strategies for driving costs out of their supply chains, according to supply chain software and service provider BravoSolution.
Low cost country sourcing (LCCS), a long-time staple of the supply management process has recently come under fire as a short-sighted and potentially risky sourcing strategy due to quality and volatility concerns. Many sourcing professionals have begun to shy away from LCCS, fearing that low quality production standards will negatively impact their brands.
But, according to Guillaume DeRoquefeuil, the Director of BravoSolution's Shanghai office, this perspective fails to account for recent developments in many low-cost countries. "We are seeing a rapid...
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Top Enterprises Are Much More Efficient at Procurement than Typical Companies Are
World-class organizations spend 22 percent less than typical companies on procurement operations that typical enterprises do, according to recent research from the Hackett Group. In its report, "2020 Vision: Delivering on the Evolving Value Proposition of Procurement," Hackett also found that top companies operate with 37 percent fewer staff than average companies. They also generate 129 percent higher spend cost savings, including reduction and avoidance while also delivering great stakeholder satisfaction and support for initiatives in sustainability, innovation, working capital improvement, and other areas.
At a typical Global 1,000 company...
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Procurement Is Important, Companies Agree. But How Many Are Treating It That Way From a Strategic Standpoint?
Nearly three quarters of the companies recently surveyed by KPMG LLP believe that procurement is a "high priority" within their organizations. Yet about half address the function mostly from the standpoint of cost instead of "value creation," the consultancy says. Reporting on its latest survey of nearly 600 global procurement and top-level executives, KPMG argues that "companies are missing business improvement opportunities by ignoring key procurement issues, especially in the areas of tax and technology." More than half claim to consider direct and indirect taxes in the way they manage  their international procurement operations, although less than a third have managed to reduce their tax burdens through...
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Mid-Sized Firm Saves by Outsourcing Procurement
Brian Slobodow, chief operating officer at Neways, a mid-sized, multi-level sales organization, is the first to admit "I am very short-staffed. I don't have a lot of people with broad procurement skills." Running lean is the company's strategy, but it's also helpful in coping with a weak economy. So he challenges the qualified professionals on staff "to do more than place purchase orders. Ideally, they should be spending...
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Getting Squeezed at Both Ends
Food and beverage producers are under pressure from government as well as consumers to retool every aspect of their supply chains in line with "green" behavior. Dave Aquino, research director at AMR Research, talks about how industry leaders are rethinking their distribution and supply strategies with regard to product design, manufacturing, packaging and transportation. The result: a major change in the way food and beverage items are merchandised, sold and consumed. Aquino also discusses the challenge of collaboration in a industry where the partners might not be equal in size and bargaining clout, and the need for customer-demand data that flows smoothly throughout the supply chain....
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Just What Is It That SCM Software Does?
It's worth mentioning that the old adage about systems only being as good as the information that they contain applies doubly to supply chain management software. If the information entered into a demand forecasting application is not accurate, then you will get...
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Past Sourcing and Procurement News issues:
November, 2008
September, 2008
July, 2008
April, 2008

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