Daily Archives: June 10, 2006

Strategic Sourcing Innovation Defined

What is Sourcing Innovation all about?

Let’s start with some definitions.

Sourcing: The process of identifying, conducting negotiations with, and forming supply agreements with suppliers of goods and services.

Strategic Sourcing: The formal process of selecting suppliers to supply products and services using sourcing best practices.

Innovation: The act of creating a new invention which may take the form of a product, process or service.

Strategic Sourcing Innovation: The process of creating and implementing new and improved sourcing procedures, processes, and technologies using best practices and experience to support and yield more valuable supply relationships.

So, what do these transformations look like?  Anything from replacing manual paper-based processes with automated e-Sourcing systems to redesigning your supplier selection processes to insure that you have sufficient geographic variation in your tier 2 and tier 3 supply chains to insure that a natural disaster does not wipe out your supply.

So how do these transformations come about?  Fortunately, despite what many agencies and consultants still might have you believe, it does not take magic, miracles, or one of those rare blinding flashes of insight to innovate.  Hard work, careful analysis, knowledge, education, and experience will produce fantastic results … with the right process.

So what does this process look like?  Well, unfortunately there is no single universal process that will work every time, but there are a number of generic processes that point you in the right direction and customizations that get you pretty close.  Once you are close, your brain (should you choose to use it) — still infinitely more powerful then any piece of software ever developed — will take you the rest of the way.  One of the things we will do in this blog is examine these processes, and associated customizations and tools, on a regular basis because the reality is, the more of these processes you have in your tool kit, the more successful you will be.

First up, an overview of an operations research model building process.  Why?  Stick around and find out!

Again, feel free to leave a comment or e-mail me at thedoctor<at>sourcinginnovation<dot>com.