Maersk E-Sourcing Efforts Lauded by The Wall Street Journal

complex sourcing

Anyone who has met Jacob Gorm Larsen, Maersk Group’s global e-sourcing manager, knows he is passionate about sourcing and market design. In many ways, he is the heir to some of the best thinkers that I worked with at FreeMarkets 15 years ago, who pioneered the concept of online auctions for sourcing with different price discovery and feedback mechanisms – nearly all of which are par for the strategic sourcing course today.

Jacob deserves to be recognized. But it’s good to see his efforts acknowledged outside of just the procurement world itself. Earlier this summer, The Wall Street Journal covered what Jacob and his team were up to at A.P. Møller-Maersk. Here are some of the highlights from the article:

  • “In 2014, Maersk’s procurement division used e-sourcing for about 89% of its business.”
  • Maersk leverages online sourcing for “data for projects spanning thousands of transportation lanes, products and suppliers, and it often does so faster and more accurately than a procurement officer hunched over an Excel spreadsheet.”
  • “Compiling data from hundreds to thousands of suppliers bidding for Maersk the optimizer analyzes scenarios to determine what combination of purchases are most cost efficient and operationally feasible.”
  • “Maersk aims to source more than $2 billion in spending using” to this sourcing optimization approach in 2015.

Kudos to The Wall Street Journal for not only recognizing Maersk but also explaining the concept of advanced sourcing in as simple manner as well, which Maersk leverages. As the WSJ notes, the approach enables suppliers to “submit multiple customized offers, then improve them throughout the process to remain competitive. That’s different from the traditional sourcing/tender process, where suppliers submit bids based on the specifications or structures put in place upfront by the buyer.”

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