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Strategic sourcing; a bridge too far?
The concept of sourcing is gaining popularity in both organisation and management studies. This article offers a conceptual framework that regards sourcing as a strategic function of a company.
Using a handful of real world examples, the authors illustrate how different levels of improvement in the sourcing function can be attained.
|Perhaps a bridge to close ...|
|Contribute:||Strategic sourcing; a bridge too far?|
|Response:||A well meant compliment to the authors of this article. They have endeavoured to establish an academic compilation of theories about and around probably one of the most dynamic and complex features of purchasing: sourcing. Critical footnote could be that the authors seem to have failed to project a personal vision and moreover a clarification to the topic introducing the matter to non-professionals. Also, I personally would have embraced a more detailed contemplation about specific area’s of business which are intensively confronted with (strategic) purchasing as a major milestone of their core-activities. One could imagine a number of cases, involving the following types of business:|
- Project related (one off projects: lumpsum turnkey: Contractors)
- Integrated supply chain (make or buy, strategic partnering, R&D: ASML)
- Large scale production (multi level purchasing, large DMU’s: Multinationals in Electronics)
- Public sector (policy and politically driven, low knowledge base: Municipality, Governmental)
Furthermore, the article could have gained momentum by introducing and briefly describing at least a number of methods of sourcing, like:
- Fairs and exhibitions
- Media sourcing (ad’s, databanks, marketplaces)
- Relation management
- Exploration of genuine potential of existing portfolio
- Competition studies
Also, the article is very modest in the required emphasis on the design basis of a product or service in relation to its sales value. Sourcing as a result of prior specification determination is often more complicated than determining the product specification based on the two essential parameters: market requirements and market resources. It is a matter of common knowledge that too many operators in the market tend to develop products or product specifications prior to thorough survey’s of potential (re)sources and proper inventory of the detailed requirements of their potential customer base. The latter is specifically related to the determination of the actual customer requirements in relation to complexity, exclusiveness and product execution. Production developers are too often extremely focussed on the exclusiveness and quality of their products for them to remain focussed on the commercial value or rather, weight, of their results. The logical consequences are often that (re)sources appear to be scares and / or owe to big a portion of the market, hence purchasing having to negotiate a narrow road. Revenues from such a forced and limited sourcing path will hardly ever benefit the company to prior expectations.
The article, as said, does introduce the readers to a relatively complete picture of the literature sources, but deserves a follow-up article by the authors in which they should dig deeper into this most interesting topic of purchasing. Nevertheless the compliment to the authors for bringing such a “dusty” purchasing topic to daylight, in which the have succeeded to draw the attention of at least some of the brothers in arms within the purchasing world.
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