Most sourcing and procurement executives instinctively focus on improving their processes, often using technology to help. Both are critical elements, but if the organization has not nurtured the right relationships (internal and external) and grown the base of internal knowledge, it will never reach peak performance. This research focuses on these often overlooked “softer” areas, exploring how companies organize, learn, and deeply integrate with strategic suppliers. Without attention to these, a company is bound to suffer shortfalls in reaching their potential.
Many companies, especially large diversified enterprises, face the challenge of balancing the need to consolidate spend globally across multiple divisions with the need to meet diverse local and divisional requirements. This is not a simple issue and there is no one right answer, as each organization is different. In this report, we explore approaches taken by several different firms to achieve this global/local balance and the pros and cons of each scheme.
We also look at why internal educational programs and knowledge sharing are so essential to sustaining high-performing supplier relationships. Employee turnover and “strategy turnover” (e.g. new leaders, new directions) happen on both sides of the buyer-supplier relationship all the time. This makes it especially difficult to sustain the relationship and maintain hard-won performance gains. Educational programs, designed by your best sourcing and procurement people in the field (not by ivory-tower experts) can help provide the organizational resilience needed to weather these changes.
We explore a world-class internal educational program that creates a foundation of common language and techniques across the enterprise, while providing the flexibility needed to deal with different geographies, different types of products and commodities, and different types of suppliers. This type of program becomes a “knowledgebase made alive” by real people in the trenches. It provides the underpinning for global success.
Finally, we examine an in-depth case study on deep strategic integration with key suppliers. This company took a cross-functional approach throughout and focused on end-to-end improvements.