Executive Briefings

Strategic Sourcing--It Changes from Case to Case

How manufacturers choose to approach strategic sourcing obviously changes from case to case. But invariably, it comes down to the integration of three main components: the process itself, organization and technological assistance. Going back to the 1990s, many manufacturers utilized consulting firms to get the process started on the right track. Firms would initialize the first couple of "waves" (each addressing a handful of supply categories) that were directed at areas of spend that had the best opportunity for benefit and were the easiest to implement.
Once they were on their way most companies would wean off the consultant's support and carry out the rest of the waves on their own. Of course, moving these operations in-house introduced a new set of challenges. Eventually software vendors stepped in to help optimize the process, offering advanced software solutions designed to help with rapid bidding events, reverse auctions and managing vendor profiles and access.Today, sourcing suites ... have become essential tools for manufacturers to sustain the benefits of their strategic sourcing programs. However, manufacturers still need to be cautious of jumping into a software solution without first changing their processes and focusing on the organization and all the necessary skill sets.
Source: Industry Week, http://industryweek.com

How manufacturers choose to approach strategic sourcing obviously changes from case to case. But invariably, it comes down to the integration of three main components: the process itself, organization and technological assistance. Going back to the 1990s, many manufacturers utilized consulting firms to get the process started on the right track. Firms would initialize the first couple of "waves" (each addressing a handful of supply categories) that were directed at areas of spend that had the best opportunity for benefit and were the easiest to implement.
Once they were on their way most companies would wean off the consultant's support and carry out the rest of the waves on their own. Of course, moving these operations in-house introduced a new set of challenges. Eventually software vendors stepped in to help optimize the process, offering advanced software solutions designed to help with rapid bidding events, reverse auctions and managing vendor profiles and access.Today, sourcing suites ... have become essential tools for manufacturers to sustain the benefits of their strategic sourcing programs. However, manufacturers still need to be cautious of jumping into a software solution without first changing their processes and focusing on the organization and all the necessary skill sets.
Source: Industry Week, http://industryweek.com