The Role of a Strategic Sourcing Professional – No Sacred Cows Allowed

on Monday, June 8, 2009

In my last post, “Strategic Sourcing – A Reality Check”, I wrote about the limited role strategic sourcing plays in many organizations. Ultimately, an effective strategic sourcing professional will shift their organization in the right direction, but it’s not easy. The spend areas with the biggest savings opportunities also tend to be the least visible (think banking, legal, marketing). In addition, end users managing categories that did not traditionally fall under “procurement” control are normally reluctant to part with the responsibility of managing the supplier relationship.

The pro’s who successfully bring about change and integrate strategic sourcing into every layer of the organization have a unique set of skills that set them apart. Every day they must balance addressing basic tactical issues (ensuring supply) with the most complex supply chain, financial, and marketing needs of the organization. Some of the roles the Strategic Sourcing Professional (SSP) must fill include:

Customer Service Guru– The customers of the SSP are the end users within their organization. Sourcing needs to make sure qualitative factors such as on-time delivery, quality, and other servicing issues are addressed, and must be mindful of existing supplier relationships. The SSP must also act as the middle man between the end user and the supplier to make sure the relationship works.

Industry Expert (in ever industry) – The end users should provide their expertise in the particular category, while the SSP brings sourcing and negotiation skills to the table. However, in many cases, the end user will prefer to keep their knowledge to themselves to see “what this purchasing guy knows”. The SSP must be able to get up to speed on any given industry quickly, understand the cost drivers in the market, and challenge traditional thinking by presenting new information.

Negotiation Superman - Able to negotiate 90 day payment terms in a single conference call! Not only does the SSP need to negotiate with suppliers, but they must be politically savvy within their own organization as well. Change is resisted on some level within most companies, but it also brings about the leverage that leads to lower prices.

Logistics Connoisseur – The SSP doesn’t just need to find that lower price, they have to make sure the new supplier can get the product to the facility in a timely manner, and using the proper delivery method. Getting a lower price from an overseas source is easy, how do we get it to our facility in Omaha with seven day lead times? What is the most effective shipping method? Can we hold inventory on site or setup a warehouse for storage? How does that impact the savings opportunity? These are all questions the sourcing pro needs to have answers to.

Administrative Specialist – Even though the SSP should be focused on aligning the company’s strategic vision with that of procurement, most people with that title will retain some level of administrative responsibility – placing the orders, make sure the PO matches the invoice, etc. If the SSP doesn’t deal with these issues directly, they are probably overseeing that function.

Not only does the SSP have involvement in almost every layer of the organization, their work is also the most visible. Any deal they put together, any pricing they negotiate, will be seen over and over again by others within the organization for years to come. They have to adapt to changing markets quickly, and revisit existing market pricing and go to market strategies on a regular basis. There are not many roles within a business require this level of cross functional expertise and organizational visibility, save that of the C-level executive in a publically traded company. For the SSP, there can be no sacred cows, even in their own backyard.

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