… that rises from the ashes and replaces the modern Procurement organization that has one foot in the grave and one in the fire. But this is not just the advanced sourcing that SI has been preaching this year, not just enhanced category management, not even just enhanced supplier relationship management or supply base management. This is really the creation and implementation of design by sourcing. Not design for sourcing, which some extremely advanced organizations are attempting (which is akin to design for recycle, which is part of design for sourcing), but truly a significant evolution of the entire function — as the only other option is, as far as the doctor can tell, to accept that it’s in its final days and will soon die out of existence regardless of what future, described in our previous two posts, comes to pass.
The reality is that the word is changing and no one needs someone who’s only job is to find a source for a product or service. Thanks to the internet, anyone can do that … and have it delivered as early as the next day if needed as these sources generally integrate with multiple global logistics carriers which have extremely quick, air-ship, options for anything from small packages to entire cargo holds. Even if the worst case happens and we get with a mega solar storm produces a solar flare 5X as powerful as the Carrington Event and takes down every power grid on earth, and the internet with it, for weeks to months, it will still be possible to find sources of supply as, guess what, you’ll be going local … back to all the factories you used to know. And you’ll be paying local currency or, more likely bartering, and it will be sales guy vs. sales guy negotiating, because that’s what they do.
So Procurement needs to evolve, fast, or join the elephants in the elephants’ graveyard. Because, let’s face, it, without evolution, that’s the only place Procurement will soon be welcome. (It won’t even be welcome in the local cemetery. With real estate becoming scarce for every use, cemeteries will soon be reserved for the honoured dead. Procurement will not even be among the honoured dead.)
But it has to go beyond the natural evolution to an Advanced Strategic Sourcing function. While this will get it over the hump and extend it’s longevity by (at least) a decade, as it will be finding value that its peers will not (for all of the reasons covered in the many posts on advanced sourcing this year, and more, on why you need to adopt an advanced sourcing solution) and have the support of the CFO as long as the value increases (and superficial savings keep hitting the bottom line), it won’t be enough. At some point, there will be template models for all the categories, including the simple tail spend categories (that will have simple models for optimization-backed options) and anyone will be able to start with those models to source their own products and services, or just turn it over to a cognitive procurement solution that will do the sourcing on its own.
So where does it need to go? Stay tuned for our next post in the series.