Another Take on Accenture's SRM Study

Last week, I posted an analysis of Accenture's recent SRM report. Now, Manufacturing Business Technology has a detailed take on the study as well. Tim "sound-bite" Minahan and Mickey North Rizza are quoted extensively. In the article, Tim refers to a new law of "diminishing returns" in procurement. "You can only take so much out of a supplier's profit margin," Tim is quoted as saying. "So now companies are into compliance -- how to make sure contracts are met in terms of service level, on-time delivery, etc. They're also looking at spending patterns ... [in addition] buying organizations [need] to shift methodology. They need to use technology not to beat suppliers up on price, but to get more flexibility." I'm certainly one for flexibility, but I would not jump the gun as much as Tim. I think there's still plenty of room to let competition run its course, even in today's environment. Indeed, the hammer never goes away -- it just gets smarter.

Jason Busch

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