The Five Principles of Sourcing – Rigour and Openness

Trade Extensions has just published the third paper in our Five Principles of Sourcing series.

We have defined five core principles that we think everyone should bear in mind when looking at developing and implementing sourcing strategies.  Our concept is modelled broadly on the principles and credos that firms such as Mars, Ikea and P&G use to define their philosophy and style. These principles help staff in terms of both thinking about day-to-day decisions, and define the philosophy and strategies of the organisation. They often come from the founders and owners of the business who are keen to see their beliefs and views carried on once they are gone.

Cynics may feel they are nothing more than a blue-chip tick-box exercise but, in our personal experience, the best examples actually mean something and affect corporate behaviour in a positive way. Similarly, we hope our five principles will help practitioners to think about and implement effective sourcing.

The first installment of the series was sub-titled “What and Why?” This gave an overview of the subject, explained the motivation behind the series, and outlined the five principles in brief. Then in the second paper, we covered Coherence and Alignment, the first two of our principles.

The new paper covers principles three and four; Rigour and Openness. Here is our overview of those two Principles.

Rigour

Once we move beyond our basic requirements, sourcing is not a trivial, routine or simple process; it requires a professional and structured approach in order to generate good outcomes. We must approach it with careful planning, and make sure adequate skilled resource is engaged in the process. We will use appropriate tools and techniques to give us the best possible results in terms of selecting suppliers and agreeing robust contracts that deliver value and advantage to the organisation.

Openness

Being open to new ideas, products, services and suppliers sits at the heart of organisational success. It is impossible to generate competitive advantage by buying the same things and using the same suppliers as all our competitors, and curiosity is a vital quality for procurement professionals. This means we must collaborate with our internal stakeholders, suppliers and potential suppliers, and look to innovate with them in terms of specification, supply techniques, technology and process.

Download the paper (and the two previous ones in the series) now; and we will feature further excerpts from it here shortly.

Discuss this:

Your email address will not be published. Required fields are marked *