More on Maersk eSourcing Programme – Messages from Trade Extensions Conference Session

In our previous article about the Maersk presentation at the recent Trade Extensions customer event, we talked positively about the way the firm has embedded eSourcing (of various types) into their procurement process. In Stockholm, Lars Harkov Hansen, eSourcing manager from the firm, told us about the three major priorities the firm is currently addressing in this area.

The first and most fascinating is what he called "Moneyball" opportunities. Moneyball refers to the book by Michael Lewis and subsequent film that explained how a US baseball team used really detailed data and statistical analytics to succeed whilst challenging some of the historical assumptions of the sport.

What it means in this context is not working out which category manager can run fastest to the coffee machine, rather, it is about using data from previous sourcing exercises and competitions to inform better design of future events and processes. That will then lead to better results - a positive feedback loop.  This is fascinating work, and we have not seen anyone taking this  type of analytics quite so far as Maersk.

For example, the team has analysed the benefits of introducing more firms into a sourcing process (like an auction) - they understand in percentage terms the likely benefit of introducing another supplier to the competition. That gives their procurement people and stakeholders a clear incentive to make sure there are enough potential suppliers in the field. They also know when enough is enough and the negatives of more bidders starts  to outweigh the positives (we won't tell you what the optimal number is in case that's a Maersk secret! )

They have worked out which day is the best for running events (Tuesday apparently) and have done detailed work looking at how much time should be allowed for tender responses and how to best organise the process of notifications, deadlines and so on to maximise supplier responses. Quite detailed stuff, but fascinating that they have been able to draw these conclusions from their data. I guess once you are running thousands of eSourcing events a year, as Maersk do, you really build up that data.

The second area of focus is “Buyer-free Sourcing”. This means providing users (budget holders) with the tools, technology and training to execute sourcing exercises themselves. But support is provided by procurement from an off-shore team, and detailed templates are provided for all steps in the process.

Finally, we heard about “Supplier Discovery ". This is about finding new suppliers, with a particularly focus on transportation providers. Here, Maersk has partnered with Carrier Plex Sourcing to set up a supplier network, using “Trip Adviser” type principles to identify and rate suppliers.

As we said in part one, there are other visionary ideas, some using the Trade Extensions TESS platform to move into areas well beyond traditional sourcing. So all in all, a very impressive presentation, and much that many organisations could learn from Maersk. But you need to be serious about this – that’s a key message. It clearly takes a clear vision and operational resource to become a world-class sourcing organisation;  Maersk has got there, others could too, but it does take time and effort.

(You can now get many of the presentations from the Stockholm event to download here).

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