There’s been a lot of debate about The Life and Death of Strategic Sourcing ever since Dalip Raheja claimed that Strategic Sourcing is Dead back in August (with numerous posts indexed at this link), and while most of it has been good, there’s been one major point missing in all of the debate to date:
Sourcing is NOT always Strategic!
That’s right! Sourcing is NOT always Strategic!
First of all, most of what you buy is not critical to operations.Consider all of the following which is bought by most businesses on the planet:
- office supplies
- office computing equipment
- janitorial services
- HR support
- print material for marketing
- electronic discovery for legal services
- outsourced manufacturing for commodity products
Not Strategic!
- office supplies
who gives an albino rat’s behind who made your stapler and copier paper and where they came from
- office computing equipment
for 99% of companies out there, as long as it runs Microsoft Office and an internet browser, who made the machine is irrelevant
- janitorial services
it’s not too hard to wash a window, sweep a floor, or empty a trash basket
- HR support
there are at least six top-tier HR-support agencies out there whose services are essentially indistinguishable
- print material for marketing
any print shop that can print 8.5″ x 11″ brochures in 16M colours does the trick
- electronic discovery for legal services
there are a number of software packages out there that do exactly the same search on exactly the same file formats and thousands of monkeys who can use them
- outsourced manufacturing for commodity products
if you’re manufacturing office supplies, clone PCs, or children’s toys, there are hundreds of factories that can get the job done
Let’s look at the definitions of the word strategic:
- Merriam-Webster: (a) a careful plan or method : a clever stratagem or (b) the art of devising or employing plans or stratagems toward a goal
- Wikipedia: a word of military origin, refers to a plan of action designed to achieve a particular goal. In military usage strategy is distinct from tactics, which are concerned with the conduct of an engagement, while strategy is concerned with how different engagements are linked
- Business Dictionary: Art and science of planning and marshalling resources for their most efficient and effective use
These say that strategy is
- carefully thought out,
- goal focussed,
- efficient, and
- distinct from its implementation, which is tactical.
Thus, if you simply jump to strategic sourcing techniques, you are not being strategic. If you’re not planning how to efficiently use all of the affected resources, you’re not being strategic. If you’re not thinking about why a certain plan of action is being considered, you’re not being strategic, and, most importantly, if what you are doing does not relate to a major business goal or objective, it’s not strategic.