Last week, I participated in a webinar (which was really more of a Q&A session than a traditional webinar) that was sponsored by Zycus. This event allowed me to tackle a address a series of “hot topic” questions across the spectrum of people, process, and technology [the archived event is here – registration is required]. One question that really got me thinking was
Do you have any advice for more tenured strategic sourcing teams? What should these teams be doing to prepare for the next 5-10 years?
I had three recommendations. The first two –
- Recommendation #1: Manage your career aggressively. Start by asking for a raise &
- Recommendation #2: Source more, source everything. Adopt the eSourcing 2.0 doctrine
are discussed in detail in this earlier article. Here’s the third recommendation –
Recommendation Number Three: Think Globally, Act Globally (Part One)
We often read and talk about the dramatic impact that globalization has had on business, politics, and life, in general, and the huge impact that globalization has had on supply chains and supply risk. The increased importance of procurement within the average enterprise has been caused, in no small part, by globalization. Truth is, we’re just getting warmed up here. The impact of globalization today is like nothing we’ll see ten years from now. Sourcing pros, many of you have been thinking globally, now is the time to start acting globally.
To do this you’ll need to develop and/or access broad market knowledge – There was a time when a category “market” was well-defined and one category manager or category council could possess a deep and penetrating view of a specific market. Those days are fleeting for many categories. The injection mold suppliers based in Michigan and Indiana or Manchester or Marseilles may still be there (although some may be gone), but this is a global category. If you were to google – Injection Molding China – you get 17.1 million results; Injection Molding Vietnam – yields 11.4 million; Injection Molding Africa has 20+ million results.
Many of the innovative production advantages that were held by Western suppliers have shrunk or disappeared as the global market of suppliers has exploded. If what (and who) you are studying in the injection molding market hasn’t changed in the past seven years or you’re still using this industry pub’s Global Plastics Sourcebook (that contains a single China-based supplier], you are not current with the market. This may be acceptable for some of your categories, some of the time. In reality, the “bleeding edge” of innovation and pricing may not be too far ahead of where your suppliers are today; of course. the “edge” may present risks. And, of course, not all categories are strategic or significant to an enterprise. At the same time, if you snooze too long, you may lose too much. Sourcing teams cannot afford to mismanage or poorly manage their categories because an erosion in value can very easily cascade across the enterprise’s good and services.
So what do you do and where do you start? Begin with a category assessment and a staff capability assessment to catalog your organization’s capabilities and knowledge and prioritize their management. What’s important? Who on staff can reasonably do what level of analysis? What are the greatest risks in taking no action? What can we access from third parties? (For example, our colleagues over at Metal Miner will soon offer a price benchmarking service that can provide current pricing for different metals in many unique regional markets) Once this initial assessment is done, engage the business leaders and executives and present your findings that includes a set of recommendations. If the stakeholders determine that immediate action is needed, you’ll be off and running. If the stakeholders determine that this is an intermediate-level issue for now, you can still begin attacking it, albeit at a more measured pace.
More on Thinking and Acting Globally next time.
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