Generally speaking, I’m not hard on CAPS Research because they tend to produce some of the best research and papers in the space, but I had to take a crack at VFS in yesterday’s post because I don’t think we need another acronym. And while it may look like I’m taking another crack at their recent Value Focused Supply publication in this post, I’m trying to point out that the next level of strategic supply management in your organization, regardless of what you call it, isn’t that hard to obtain. It’s just the next rung on the ladder, and only one small addition to the capability repertoire will get an organization there.
According to the white paper, the critical enablers of VFS are:
- executive engagement
No initiative will succeed over the long term without executive engagement, which is also a critical enabler of classic competitive supply strategies.
- value chain goal alignment and measurement
This is a fundamental requirement of any supply strategy designed to enhance an organization’s overall competitive position — and a core requirement for any enhanced competitive supply strategy, such as DDSN and TVM.
- supply market understanding
Without supply market understanding, even a simple e-Auction will fail miserably.
- collaboration approaches
The best results always materialize from collaboration.
- supplier relationships
Without a good supplier relationship, quality, on-time delivery, and emergency orders are at risk.
- organization and human resources
The right people will always be required to pull the strategy off.
- information/analytic capabilities
This is essentially the only enabler that’s new, sort-of. While information/analytic capabilities are a requirement of competitive sourcing strategies, as good information is necessary to select the right strategy and analyze the bids, classic competitive sourcing did not require decision optimization, modern (POS-based) forecasting techniques, inventory optimization strategies, or (true) spend analysis.
Thus, any organization that has mastered standard competitive sourcing can easily move on to next generation sourcing strategies simply by adding a new tool or two to their toolkit — complete overhauls not required.