Daily Archives: December 17, 2006

On the Fifth Day of X-Mas (Cross-Functional Sourcing Team)

On the fifth day of X-Mas
my blogger gave to me
five golden rings,
four little words,
tri-focal lens,
two boxing gloves,
and a lesson in strategy.

Five Golden Rings

Sales and Marketing.
Product Development.
Human Resources.

A good procurement/sourcing/supply chain department is at the intersection of each of these departments. It works with Product Development to understand their needs with respect to quality, reliability, and functionality. It works with Sales and Marketing to understand what product characteristics can be expounded upon to generate buzz or increase perceived value (and, ultimately, the sale price). It works with Human Resources to understand organizational values and qualities to look for in potential strategic partners. It works with Finance to understand cash-flow requirements and preferred payment terms. It works with legal to create the best contracts for the organization and to make sure they appropriately protect the organization against all foreseen risks.

Representatives of each of these departments should be involved to the appropriate degree from the get-go of any sourcing project to streamline the process. During RFP formulation, legal and finance can help you nail down the terms and conditions in the template contract to streamline contract signing down the road. Product Development and Human Resources can help you pre-qualify suppliers. Sales and Marketing can assist you in the RFP evaluations.

Involving the right stakeholders throughout the process will help you make the right decision every time and assist you in maximizing the value of each and every sourcing effort.