When it Comes to an Event, How Big is Too Big?

1 Category?
5 Categories?
25 Categories?

10 Commodities?
50 Commodities?
100 Commodities?

50 Lanes?
500 Lanes?
5000 Lanes?

It depends. How much can you handle at one time?

If you’re sourcing with optimization, the bigger the better. Tackle as many categories at a time that overlap with at least one other category, especially if you are dealing with physical goods that are coming from common locations. The way you save on logistics costs is to minimize the number of trucks, which occurs when you can combine as many shipments as possible as to minimize the number of LTL shipments.

Or if you are dealing with multiple service categories that can sometimes be provided by the same contract or temporary labour agencies. For example, engineers and software developers are often offered by the same specialist agencies; warehouse, janitorial, security and other unskilled labour are often obtainable from the same agency; and certain others specialize in legal, accounting, and similar trade professions.

Tackling them all as one mega-project doesn’t mean that you have to negotiate with them all simultaneously or that you have to create massive RFXs, Auctions, or bid-sheets. There’s nothing stopping you from organizing your sourcing events so that each category is being sourced simultaneously by a different team member, co-ordinated so that all of the bids come in simultaneously for a round of global optimizations to determine if there is any overlap in transportation or supply base that would suggest a (temporary) combination of categories or a splitting of transportation into a separate project.

Optimization isn’t just doing the best job you can on the event, it’s defining the right event in the first place. Sometimes the best way to do this is to look at a number of categories simultaneously when they are each in the middle of a sourcing project and see if the definition and split really is the right one. If the mega-optimization suggests something different, re-define the categories and events and continue the right way.

Just make sure that, when the event notice goes out, that you inform suppliers / carriers that the bids will be multi-round and that the scope of the transportation requirements might be increased or decreased after initial bid analysis and further category definition; or, in the services case, that this is a preliminary request for information and rate cards and that the suppliers should inform you of other services they can offer and standard rates for those as you may, if the option exists, expand your requests during the final RFQ / negotiation phase (as you want to be above board during the entire process).

In other words, a project is only too big when it exceeds the ability of your current team to manage it simultaneously. If the numbers involved makes someone fidgety, then it’s time they shape up or you find someone with a stronger backbone. If the tool you are using says it’s too big, then it’s time to get a new tool. It’s not too big if it doesn’t exceed your current potential, which for many leading sourcing organizations is well beyond what they think it is (as a result of sourcing providers with limited skill sets assuming that just because they can’t handle it that their client can’t handle it). There are teams out there that can handle Billion Dollar sourcing projects and tools that supper them. That’s about as big as it gets.

So, as Big Data Promoters like to say, Think Big!