Sourcing Event Complexity – Thinking Through Event Size Limits (Part 2) Jason Busch - October 23, 2014 6:31 AM | Categories: Sourcing, Supply Chain | Tags: L1, Sourcing and Categories Earlier this month, I commented on Michael Lamoreux’s recent post in which he suggested that we should all “go big” when it comes to including as much coverage and complexity as possible in single sourcing events by leveraging sourcing optimization technology. His post is fabulous – but as I said earlier, Michael is channeling positive thoughts about most companies' ability to even take advantage of the basics around sourcing event complexity (most aren’t even 10% of the way there to being able to push the limits of technology). He even agrees with this argument, noting that, “A project is only too big when it exceeds the ability of your current team to manage it simultaneously. If the numbers involved makes someone fidgety, then it’s time they shape up or you find someone with a stronger backbone.” I wish it were only that easy. But the rest of his argument is spot on. As Michael observes, the power of optimization is not just in being able to add scale to the sourcing process by tackling bigger and bigger categories, datasets and supply chain variables – it’s in rethinking souring in the first place. To wit: Optimization isn’t just doing the best job you can on the event, it’s defining the right event in the first place. Sometimes the best way to do this is to look at a number of categories simultaneously when they are each in the middle of a sourcing project and see if the definition and split really is the right one. If the mega-optimization suggests something different, re-define the categories and events and continue the right way. The idea of staying malleable in the sourcing process once it has begun is anathema to traditional strategic sourcing processes. But it truly is the future. Just as the earliest sailors realized it might take forever to get from Point A to Point B in a straight line depending on the winds – and that they had to “tack” back and forth to achieve a specific distance faster – so too will procurement eventually come to realize that “big sourcing,” for lack of a better phrase, is truly a process that can’t be completely stamped out ahead of time as we’ve come to think of 5 or 7 step sources processes from the time when McKinsey, FreeMarkets and AT Kearney were pioneering this stuff. We must learn (and adjust our course) based on the supply market and business constraint winds after the journey begins. But indeed, above all, as Michael suggests, “think big” about procurement and think big about sourcing events. Just don’t forget everything that must go along with such a shift – including all the soft organizational factors. Voices (2) Jason Busch: 25.10.2014 at 9:01 am Barb, Thanks so much for chiming in. Influencing Change is a great tie-in to being able to push advanced sourcing opportunities (and broader programs) forward. Agreed! Reply Barb Ardell: 23.10.2014 at 8:42 am Agree completely! You need to begin with the end in mind, but also let the data guide you. As you say, Jason, you must also address the soft organizational factors such as change management. I worked on a sourcing event with a client that identified millions of dollars in savings but the category manager couldn’t influence his internal stakeholders to make the necessary changes. The savings went totally unrealized. For some tips on Influencing Change, I direct you to a 2 part series previously published on Spend Matters: http://spendmatters.com/2014/01/22/influencing-change-solution-procurements-change-challenges-part-1/ and http://spendmatters.com/2014/01/29/influencing-change-solution-procurements-change-challenges-part-2/ Reply Discuss this: Cancel reply Your email address will not be published. Required fields are marked *Comment Name * Email * Website Notify me of follow-up comments by email. Notify me of new posts by email.