But Will It Be Enough?
If you surf on over to the Innovative Analytics and Training website, you can download a white-paper on Strategic Sourcing 2.0. Focussed on automating networks and analysis in a more rigorous fashion, it’s a nice take compared to the standard sourcing methodologies that many big name consultancies have been putting forward, but, especially these days, sourcing is a multi-disciplinary exercise that requires a lot of inputs up front to get it right.
The model put forward covers five core capabilities that the author believes are key to successful global sourcing. Specifically, building on the core dimensions of information, people, technology, and infrastructure, these capabilities are:
- Source Discovery
Source discovery is the process of identifying the right partners, vendors, and suppliers. This phase starts with an information gathering phase that identifies the potential partners, vendors, and suppliers and gathers all of the factual and objective information that is available. This phase often involves web searching and crowdsourcing. - Source Evaluation
Once potential sources are identified, a careful evaluation process begins. In this phase, the author recommends accessing a multi-cultural expert network to assist with a rigorous evaluation that considers a potential supplier’s capabilities, economics, resilience risks, responsiveness, strategic alignment, and other advantages or disadvantages to your specific situation. - Source Network Management
Legacy IT systems are architecturally inadequate and unable to provide multi-company visibility, collaboration and flawless transaction execution across an ever-growing network of customers, suppliers, outsourcing providers and employees. State of the art systems, in comparison, support multi-enterprise sourcing networks with sensors that provide all parties near real-time insight into the network’s performance. A multi-enterprise sourcing network, built on an open-architecture delivered on a SaaS platform, provides real-time insight into all aspects of the sourcing network. - Sourcing Analytics
Based on the philosophy that competitive advantage can be sustained in the future by advancing the quality of one’s insight anddecisions – the outcomes of analysis, sourcing analytics is an emerging analytic discipline focused on strategic sourcing that must be a core competency of any modern global sourcing organization, which must also have an eye angled toward optimization. At the very least, this platform must support the computation of the core metrics of perfect order, cycle time, supply chain flexibility, supply chain management cost, and cash-to-cash cycle time. - Sourcing Resilience
A resilient network, at a minimum, includes:- acceptable levels of redundancy,
- acceptable security,
- insight into business, network, and risk,
- rapid insight and response protocols for disruptions, and
- continuity of planning.
It seems to address all of the core requirements for modern sourcing, but, and this is the biggie, does it support a comprehensive framework for risk management. Risk is the fifth dimension after people, information, technology, and infrastructure, and if you aren’t managing risk in a cohesive fashion across the process, it will be all too easy for something to slip through.