2012 Predictions and Planning: Sourcing and Beyond (A Webinar and Blog Series) — Part 1

On Wednesday, February 15th (tomorrow!) at 11:00 AM ET, I'll be presenting on a Supply Chain Brain hosted webinar (sponsored and supported with some cool sourcing use cases by CombineNet) titled 2012 Predictions and Planning for Procurement and Sourcing. The premise of my discussion is that past sourcing and procurement approaches are no longer enough to guarantee savings in the current climate (let alone avoid price increases and risk volatility). I'll suggest that procurement organizations and the programs they deploy need to become more rounded -- they need a liberal arts education in business, economies, countries, commodities, etc. rather than a narrow focus on buying processes. In other words, procurement organizations need to behave more like the great minds that collaborated and produced ageless works during the Renaissance, combining the study of multiple disciplines and theory.

How can procurement organizations go about getting smarter in the current climate? I'll suggest that there are four key elements, including:

  • Awareness of key issues, economic trends, commodity markets
  • Tactics to augment traditional sourcing models with new capabilities
  • Awareness of technology to transform sourcing, commodity and category management approaches
  • How to put all of the above together and into practice

During the discussion, I'll examine each of these elements across a number of specific trends and areas of emphasis we're seeing in the market, including:

  • Sourcing in volatile commodity and currency markets
  • How the European economic climate will affect global sourcing and supply chain activities
  • Renewed calls for nearshoring (i.e. "Made-in-the-USA")–hype or reality, and the related sourcing reactions?
  • How evolving technology capabilities are increasing the capabilities of front-line sourcing and category managers
  • The evolution of Total Cost of Ownership (TCO) -- factoring in quality, risk, materials compliance, regulation, CSR, etc.

We'll plan to get into not just the "why" in the discussion, but also the "how," showing attendees how they can begin to model these different factors and elements into their own sourcing decisions and cost models. But first we'll start with the basics, including the current economic situation and juxtaposition (and implications) of a challenging 2012 in Europe set against GDP economic growth forecasts in the China, India, the US and much of Central and South America.

As part of this macro-level discussion, we'll also explore some of the elements driving commodity volatility in 2012, including emerging market demand, supply chain disruptions and related areas. China is worthy of discussion here, and we wish we could give it more time than we have, because of a slowing GDP growth rate (8.9% in the most recent quarter, which is the lowest since Q4 2009) and conflicting China PMI numbers based on the story the government is telling versus independent economists examining similar underlying data.

Another topic we'll touch on is organizational predictions for the sourcing teams of tomorrow. Here, one scenario we'll introduce is how leading organizations will continue to add or refocus existing resources to take advantage of advanced technologies and processes while generally "up-skilling" their procurement teams with additional flexibility. In addition, we'll explore how more innovative procurement and sourcing teams are placing a greater emphasis on new types of sourcing strategies (and approaches) that take advantage of applied technologies such as optimization and scenario analysis to achieve continuous cost reductions through supplier innovation, commodity management and risk management strategies.

Perhaps my most important objective of the webinar is to show how a new set of primary inputs (e.g., country/geographic volatility (economic), currency volatility, commodity volatility, total cost understanding/modeling) is already driving how leaders source and manage direct materials agreements and relationships with suppliers -- and how technology is following close behind to enable new models and criteria that should factor into making decisions. If you can make it, please join me tomorrow for the webinar 2012 Predictions and Planning for Procurement and Sourcing. We'll feature some additional content from the webinar on the site next week and we expect a recording will also be available.

I don't usually "pimp my own webinars" so to speak. But this is one topic that I'm quite excited about and the way the hands-on content has come together goes beyond the typical level of material covered in a webinar format. So join me!

- Jason Busch

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