CAPS Research recently released their focus study on the role of optimization in strategic sourcing (summary) by Larry Giumipero and Philip Carter. I’ll dig into it in future posts (in the fall; I’ll let you enjoy what’s left of the summer before I get into the heavy stuff), but for now I’d like to say that I was thrilled to see this quote in chapter 9 on the future of optimization:
The vision is to push optimization to all buyers. The eventual goal is to run every item we buy through the system.
For those of you who are Christian, I urge you to shout Hallelujah from the rooftops! This is how it’s supposed to be. Every sourcing professional is supposed to be using decision optimization on every sourcing event … even if all they do is run an unconstrained scenario to understand what the lowest cost option is and how their preferred award stacks up. (While it’s okay to spend 10% more for 20% more value, unwittingly spending 20% more for 10% more value is not a smart move. Ever.)
I was also very pleased to see that at least one user thought that optimization could be used to optimize the entire supply chain (as it can) and that
We are always looking for international sources and new suppliers to run optimization.