How much decision-making responsibility resides with each section of a company's supply chain leadership? Where does tactical thinking end and strategy begin? These questions may determine whether sourcing operations live up to corporate expectations, fall short, or excel beyond businesses' goals. In the end, making sure sourcing input is made early in the process, and given appropriate overall weight for decision-making purposes, is the crux of strategic sourcing. It's up to organizations to figure out how to make this connection.
Getting personnel on the same page
Supply and Demand Chain Executive contributor Chris Crane recently explained that ingrained mindsets currently hold that procurement is a tactical rather than strategic operation, with personnel not getting involved until the only matters left to settle are the specifics of deals with suppliers. Crane believes that shaking off this current operational structure and including procurement teams in the strategic matters underlying the supply chain will have positive effects, to the tune of 9 percent sourcing budget savings.
Procurement officials hoping to get involved in some of the higher-level decisions behind deal-making should be ready to shake up the orthodoxy of their companies' operations. Crane suggested using logic to institute such a change, with sourcing pros pointing out that they and the IT solutions they use can inform the rest of the organization and save money.
When departments have strategic souring tools that set responsibilities by the individual, they can help get the new partnership between traditional leaders and procurement teams working. Crane noted that communication in general is an essential part of improving the supply chain. When every part of the organization knows what the rest is doing, there is less chance that a new approach to sourcing will lead to short- or long-term confusion or inefficiency. This close, new relationship between departments can deliver real financial advantages over time.
Having people working in tandem toward better deals and improved procurement is one way to make the whole process, but it's worth considering whether those individuals have the tools they need to make ideal decisions. Spend Matters explained that the singular platforms used by sourcing operations - the ones Crane recommended to help the team communicate on strategic matters - should also become repositories of real-time data.
When companies can all have access to the same streams of content, especially about matters such as previous purchase records, inventory information and market reports, they are ready to work intelligently with their suppliers. A disconnect about these facts - or a simple lack of insights - could prevent teams from working together effectively and limit their ability to maximize sourcing effectiveness.
The two elements described above are closely tied together: Having the right content to inform decisions is one way to make those choices better, and opening them up to expert employees is another. The goal when it comes to procurement is simple: Get the company the best possible deal. The methods organizations are using to reach that objective are becoming more varied and forward-thinking today, but that strong central objective remains at the center of operations.