Balancing a Global Sourcing Staff

What's the ideal mix of global sourcing practitioners to have on the ground in developing markets? According to this Purchasing article, ArvinMeritor, a tier one automotive company, has observed that it's critical to examine the "ratio of supplier development specialists to buyers." It's also essential to consider "the ratio of ex-pats to indigenous people. ArvinMeritor believes that "you absolutely need a ratio of more than one supplier development person for every buyer working in a leading cost-competitive country ... a perfect ratio would be two supplier development specialists for every one buyer".

In my experience, this newfound emphasis on supplier development is not something that most procurement organizations which are just starting to go global are ready to support. Nor are their technology systems -- which often emphasize negotiations, decision support, transaction monitoring, and transaction efficiency over other areas. Supplier development and performance management are different. And this new ratio that favors supplier development staff over sourcing and negotiation professionals should be a wake-up call to vendors focused on traditonal Spend Management technology areas that there's tremendous opportunity to develop enabling technologies that focus on improving and developing suppliers -- not just negotiating with them and transacting more efficiently.

Jason Busch

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