Join the argument. Strategic Sourcing alive or dead? Part I of II.

September 17th, 2010

I have tried to stay away from this argument as I often think that as a subject or buzzword mature, industry practitioners try to change the vernacular of the industry in order to fit their marketing messages.

This author believes that strategic sourcing requires the same elements that any strategic program does in order to be considered strategic. Once these elements are in place within a company it becomes much easier to determine if the program, practices, solutions and tools that support it are strategic in nature.

Most companies, at least most successful or destined to be successful companies have a vision that is supported by a strategic plan and then broken down into a tactical plan. The plan is adjusted and updated over time as it moves along a path of predetermined? goals or milestones that are typically measurements against a pre determined goal. In order for a strategic plan to be successful there are certain elements organizations need to know. I?ll just list a few as an example.

1.?Your own company.
2.?Your Industry. Example: Retail.
3.?Your vertical within your industry.
4.?Your competition. Be careful.
5.?Your category.
6.?Your product.

If you do not know the above like the back of your hand as well as their interaction points, then your strategic plan already has flaws in it and getting organizations within the company to have linkage with the total company strategic plan is also flawed. This model can be applied to the entire company as well as organizations within the company such as the supply chain or procurement.

This author also believes that determining if something is dead has a lot to do with determining if it still has a use. In the retail space in lower tier one and tier two there really have never been any strategic sourcing tools deployed and many of these companies operate on a business as usual format. They may make claims like we are an EDLP company or a Cost Plus company when in fact they are not. They may think that a specific company is their competition when their primary competition comes from a completely different vertical.

If you check back on Monday I?ll delve more deeply into this subject and answer the question in Part II of this post as to whether the subject matter is dead or alive. Then you can make up your own mind.

We look forward to and appreciate your comments.

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