Complex Sourcing – Download our New Paper Now

How do you classify and segment the different types of procurement activity that go on in your business or organisation? There is a fine question to get you thinking on a sunny Tuesday morning.

In the procurement world, the most common method for the last 20 years or so has been the category management approach. Before that became formalised, some organisations had a rudimentary form of category allocation, but others hardly segmented at all, with procurement staff dealing with whatever requisitions and requests hit their desks pretty randomly. Category management segments based on the product or service being bought obviously – whether that may be dairy products, gearboxes, IT hardware, professional services and so on.

Other organisations, in whole or part, segment based on the client group of procurement. So in a larger organisation we might have one procurement professional or team looking after a certain business unit, location or the needs of another function (like HR or marketing). In many big organisations, the segmentation covers both of those factors, so a blended or matrix model may look to put procurement staff facing both customers and categories.

But maybe there is another way of looking at the procurement world, which we explain in our new briefing paper, sponsored by sourcing technology firm Trade Extensions, and titled  What defines complex sourcing – and why does it matter?   We believe that there is merit in looking at how complex a particular sourcing area or task is, and considering what synergies and benefits might be gained by looking at sourcing complexity as a key driver of resources, structure and approach.

Why do we say that? Because the most complex sourcing activities are often (almost by definition) where much of the greatest procurement risk and opportunity must lie. A complex sourcing task, or a category that has inherent complex sourcing characteristics, has more scope for competitive differentiation. You may be able to gain real advantage by doing it well compared to your competitors. It also requires some particular and high level skills and the right resources, including technology, to make a success of it. Again, almost by definition, we can’t execute complex sourcing tasks with a pencil and paper or even Excel and Google.

We will move into what we mean by complex sourcing in more detail, and start getting into the factors that define it, in the next of our series. But for now, you can download the paper here, free on registration.

 

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