Thinking Sourcing While Getting Lean

Over on Sourcing Innovation, Michael Lamoureux plugs the concept of Lean Sourcing, which combines elements of strategic sourcing and lean manufacturing to reduce the total landed / manufactured costs for materials (full disclosure: I have a financial interest in the concept he is plugging through my wife's consulting firm). Far beyond self interest, however, I firmly believe that in the years to come, we'll see a global environment ripe with opportunity for cost takeout opportunities for large and small manufacturers alike. But once companies achieve a degree of cost savings through deploying lean and strategic sourcing individually, they'll need to combine both elements to achieve next level savings.

For example, it will no longer be enough to optimize for lowest total landed cost on a delivered unit basis without taking into account additional value-added capabiliites that a supplier can offer such as vendor managed inventory (VMI) or just-in-time (JIT) sequencing. Only by truly understanding the components of a lean operating environment and combining rigorous, analytical- and process-driven sourcing methodologies will manufacturers truly be able to maximize their cost and risk reduction opportunities. And what's most interesting here, is that the opportunity is not so much around technology -- granted, better total cost management and scenario building / risk modeling tools would be nice -- but from an operational and educational perspective. Mandatory lean -- not to mention Six Sigma -- training for procurement, anyone?

Jason Busch

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