Tuesday 24 March 2015

Develop Strategic Sourcing as a Saving Stream

Authored by Usama Shahid

Sourcing models that enable organizations to go beyond basic bidding strategies, cost savings we think there’s a general lack of awareness in the market about how these sourcing models work. Best-in-class companies recognize strategic sourcing as a value creator and consider it to be integral to their overall strategies for growth. Here's what it takes to bring your organization up to that level.

To become a world-class procurement organization, company requires following competencies that will enable it to effect strategic sourcing and transfer value throughout the supply chain from supplier to customer. These four competencies are the building blocks that support value creation. They are:
  • The competencies needed to get the goods where they need to be, when they need to be there
  • The competencies required to anticipate and meet future demand
  • The competencies to do so in a customer driven environment
  • The competencies necessary to manage the flow of information throughout an extended supply chain
Most companies face a number of challenges in trying to determine their current level of those competencies and in transforming their organizations to achieve the highest level of performance. In general, they face three barriers to doing so. First, they are not sure what competencies are really required to support a value-creating, world class, strategic sourcing and supply chain organization. Second, even if they could define "world class" in terms of competencies, they are not sure how to determine whether their sourcing and supply chain professionals (and the organization as a whole) can perform at the level of proficiency needed to achieve world-class results. And finally, most organizations struggle to determine the best way to support a transformation of individual and organizational competencies that will substantially and sustainably, raise their competency level in the strategic sourcing and supply chain arenas.