to an extent on direct categories. Given this phenomenon, leading
companies are defining the roles of individual companies more exactinglyfor
example, by determining whether a particular supplier is expected to
provide the lowest possible price or to take on a value-based role by
contributing through technological advancements and other innovations.
A critical element in this decision making is a clear articulation of the
sourcing functions goals, which need to include elements of not only
price, but also preferential access and business partnership development,
while meeting quality, and service requirements and ensuring
responsiveness.
Juxtaposed with the phenomenon of consolidation, leading companies
continuously renew and reinvigorate their supply base, bringing in new
players who not only add competitiveness-led market benefits but also
new technology and a willingness to learn, improve and develop
capabilities.
Relationship Management: Finding supply chain partners & ensuring a
healthy alliance requires attention to a short list of commonsensical
considerations. Not heeding one or more can mean the difference
between a business combination that succeeds with the hoped-for
synergy and one that limps along at less than its full power to realize
anticipated benefits. (See sidebar for ten ways to ensure that your
alliance stays healthy and thrives)
LEVERAGING INFORMATION AND TECHNOLOGY ENABLERS AS
KEY DIFFERENTIATORS
For the supply function, information is the raw material from which
sourcing is fabricated; without information, sourcing professionals will
make flawed decisions with catastrophic business results. As the building
block of sourcing, information is a critical design element. Organizational
structure needs to consider where information comes from, where it
goes, where it resides, and how it is controlled. There are several
different types of information: transactional information (such as
specifications, prices, and purchase orders), business management
information (volume and cost plans, exception management, and new
product introductions), and market information (commodity supply and
demand and industry and supplier analytics).
Internal information like transactional information has been covered
adequately through enterprise resource planning systems- web based
tools are enabling companies to capture and share operational
information across the supply chain to all its partners.