The Gorilla And The Hummingbird
“It’s like trying to be the 800 pound gorilla and a hummingbird at the same time!” remarked a senior executive discussing the challenges of achieving excellence in strategic sourcing and procurement.
That comment raised two questions: What did he mean? And why is it so hard to achieve?
At the strategic level, companies require strong sourcing capabilities to ensure quality and price criteria are met. Strategic sourcing teams can also help to establish the corporate standards and procedures that ensure maximum leverage with approved supplier lists. However, organizations that focus primarily on strategic sourcing are often perceived as bureaucrats. In the eyes of the business lines, they can become the 800-pound gorilla that prevents progress, agility and innovation.
Therefore, strong service needs to be provided to transact within the corporate frameworks established by the strategic sourcing team. This is the procurement or purchasing team’s role. Comparatively speaking, they function more like a hummingbird: they flit from transaction to transaction and keep the business moving (and compliant).
Balancing these priorities is a key part of getting the sourcing solution right and it is a big challenge many companies face today. Strategic sourcing resources focus on minimizing cost and risk across the company’s supply chain, but do not always have the in-depth subject matter expertise of a purchasing resource. Purchasing resources focus on ensuring that products are delivered at the highest possible quality and within project deadlines, but do not always have the company-wide view of decision-making impacts.
Making resourcing decisions is further complicated by the nature of the activities themselves. While strategic sourcing can require a lot of time within one year, once contracts in categories are in place, sourcing resources can end up underutilized. Conversely, the demands of daily transactions for a demanding internal customer base can completely absorb your purchasing resources, thereby leaving suppliers in place without appropriate market tension for years on end.
In the current economy, staffing is often lean. Strategic sourcing resources are often different in both temperament and skillset to purchasing resources. Companies end up making decisions about resource deployment that have unintentional consequences. Focusing solely on sourcing may drive the business to conduct rogue purchasing. Focusing solely on purchasing reduces a company’s overall control of its supply chain. Both can result in higher costs.
At LogicSource, we believe that, as a result of these challenges, companies’ sourcing operations often become unbalanced over time. It’s hard to be both the gorilla and the hummingbird.
That’s why our client solutions are designed to augment whichever pieces of the sourcing solution are needed most. Our on-demand shared service resources can fill in gaps in strategic sourcing capabilities on an as-needed basis. Our onsite teams ensure that day-to-day purchasing needs are adequately supported. And both groups are connected to each other, their upstream internal creative customers, and the marketplace, via our OneMarket technology platform.
How would you describe your sourcing and purchasing capabilities, and how balanced is your sourcing solution? Are you doing better as a gorilla or a hummingbird? Are you doing both well? These are some of the fundamental questions we can explore together in a Mutual Value Assessment.Tags: Strategic Sourcing, On Demand Resources