Let’s face it: “strategic sourcing” as typically implemented is not very strategic.
Why? There are many reasons:
- Segmenting spend categories for strategic sourcing is a great default way to organize similar suppliers, but it’s still reductionist in the sense that cross-category opportunities get missed — make versus buy analysis, changing or re-bidding your inbound transportation, active best-shoring, etc. The same principle applies to supplier management, too
- “Opportunity identification” is too often driven an inside-out process by legacy performance metrics, priorities du jour, biases (e.g., re-using existing suppliers/technologies with dying technologies) and consulting frameworks (e.g., wave charts to implement easy savings projects) rather than by outside-in changing conditions
- Poorly aligned and stovepiped metrics. Procurement is measured on purchase price; quality groups are measured on quality; supply chain operations measured on fulfillment; R&D is measured on innovation; nobody is measured on supply risk. These groups are not optimizing total supply performance
- Misalignment between procurement and the broader supply chain processes across multiple areas. (See our report on this for more)
- Strategic sourcing tools tend to analyze forensic spend and then engage suppliers commercially through RFX/negotiation tools, but you still have to research the market, model the costs, develop a strategy, discover the suppliers and so on. Then when it’s done, your knowledge gets stuck in a binder, spreadsheets or Sharepoint rather than getting persisted into a broader analytics/intelligence platform
- Traditional sourcing and supply chain applications are too often “empty” and don’t have any domain-specific content integrated into them. It’s incumbent on you to build up your knowledge base and link up external market content and intelligence, which unfortunately too often is a misnomer and a fancy label for low-level external data
So, what’s the fix here? Well, I went back to an old framework I did about 15 years ago and it had a design ideal about near-real-time extended supply network [re]design that would use external intelligence married to internal data to better inform the firm about potential improvements to the extended supply network. In other words, real strategic sourcing is about this redesigning of the upstream supply network to create advantage (e.g., with innovative suppliers where you collaborate and co-create for mutual gain).
In a massively complex global supply chain, wouldn’t it be nice to have an extended network redesign tool that lets you not just map your internal network or your extended but also automatically infuse external intelligence into the platform to help you do “opportunity identification” per the n-step sourcing process? And wouldn’t it be nice to have this strategic supply chain sourcing analytics platform served up in the cloud and built by leading edge companies and the experts who serve them?
This is where Deloitte’s Global Sourcing Insights (GSI) analytics platform comes in. It’s a subscription-based supply chain sourcing analytics platform that uses a Tableau-styled set of modular analytics that plug into an extended supply network modeling environment. You load up your spend and your suppliers into the platform (like other tools in the market), but then the fun really begins. I spent many hours with the Deloitte team going through the various analytics and was pretty much blown away by what they’ve developed and where they’re going with it. I literally heard Austin Powers in my head saying, “Yeah baby yeah!”
You won’t be able to find any information on it publicly, and there’s only so much I can even share about it in our companion Spend Matters PRO piece, but if you want to talk to Deloitte, please reach out to Dan Gantzer (email@example.com) or Brian Umbenhauer (firstname.lastname@example.org).