Why Non-Strategic Sourcing is Important Too — Take a Survey to Explore Just How Much!

Spend Matters welcomes some thoughts from Hackett's Pierre Mitchell today. He is soliciting some last minute input from Spend Matters readers to fill out a quick survey.

One of the most basic procurement strategies is to separate transactional purchasing from strategic sourcing. Yet not all strategic sourcing techniques are implemented strategically. There are two aspects to this. First, sourcing methodologies themselves can only go so far in supporting broader category management objectives and other strategic procurement activities. We have already published research in this area, and there has been more than enough blog chatter on the topic, so we won't tread old ground here.

The other aspect though is an area that our advisory program membership (at Hackett) has been asking about, so, we're doing a quick poll study for "tactical sourcing." Some might call this "tactical buying" but we want to be more precise in separating sourcing (pre-contract) activity from buying (Req/PO approval, placement, and subsequent scheduling/receiving). Whether you call it tactical buying, spot buying, three-bids-and-a-buy or whatever else, it's an important area because it can drain productivity of sourcing resources from an efficiency standpoint and also forego savings opportunities from an effectiveness standpoint. Either way, there's typically not enough rigor in managing it.

Different types of spend require different types of sourcing, so our study asks a handful of questions regarding the size and nature of this tactical sourcing spend (e.g., what is the mix on one-time buys, low-dollar buys, predetermined category rules, etc. on the process) in terms of spend, transactions, FTEs, performance (e.g., savings), and challenges. Then we also look at the resource models, spend thresholds, policies/processes, systems and practices (e.g., rules-based workflow, "buying desks," BPO, technology-enabled "guided buying" experience, etc.) that companies are employing.

We have already gotten some interesting preliminary results, but are looking to get a larger sample size so that we can do some additional industry analysis and top performer analyses. The study will only be open until August 5, so interested practitioners should complete it by next Friday. Don't delay!

- Pierre Mitchell

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