I attended a Procurement Leaders Network event last week and was sitting in on a practitioner panel comprised of Owens Corning, Metso, and Tate & Lyle. Owens Corning was a great example of an old-school US manufacturer (of fiberglass) going global with a brand message of innovation-based and sustainable energy savings solutions (which is obviously a key need in energy-constrained regions). Most of the firm’s growth is targeted at emerged markets like BRIC countries, and it has 9 plants in China alone. Steve Nowak is the head of global sourcing at Owens Corning and he mentioned the importance of suppliers in supporting global growth plans. Steve should know, since he has also spent a lot of time in the business helping to create licensing agreements and JVs in emerging markets. As he said of suppliers during the panel: “Who else would be more motivated than your suppliers to help you grow?”
This statement got me thinking (god forbid!) about the new term ‘CrowdSelling,’ and that it might be as big as crowdsourcing to procurement. In procurement, crowdsourcing is about tapping the power of the potential supply market (not just current preferred suppliers) to innovate and solve hard problems. CrowdSelling, on the other hand, is about tapping current suppliers (not just preferred suppliers in spend category XYZ) to help you grow the top line. Of course, it could also just be another form of crowdsourcing with the problem being “grow my top line,” but let’s not get in the way of a new buzzword here.
CrowdSelling sounds straightforward, but procurement can be its own worst enemy here if it is not measured on such growth uplift from suppliers. If your CEO wants growth from suppliers (e.g., think about the P&G CEO mandate for >50% of innovation coming from outside of P&G), then hopefully that shows up in the ‘balanced scorecard’ for your suppliers, right? And it shows up in the CPO scorecard, the category scorecard, and the supplier scorecard, right?
The focus on procurement-enabled value creation beyond TCO reduction has been one of the biggest topics for progressive organizations that I’ve worked with over the last decade, and the top-line metrics have finally begun to increase their prevalence in the procurement scorecard over the last few years (we measured this in an old Hackett study, here, which has some good tactics for integration into revenue-focused processes internally). Steve from Owens Corning mentioned that “sourcing is the mirror image of sales” and that his sourcing staff often start their career rotation by working in the sales organization for a few years. Many CPOs and other procurement staff are pulled from sales, from internal clients, from suppliers, or combinations thereof to ensure an appreciation of both sides of the table.