The Five Principles of Sourcing – Coherence and Alignment

A little while back, we launched our Five Principles of Sourcing idea.  Inspired by conversations with Trade Extensions, whose software supports the most challenging, interesting and tricky sourcing work in the world, we have defined five core principles that we think everyone should bear in mind when looking at developing and implementing sourcing strategies.  We will be covering these in some depth through this year in a number of short briefing papers, and today we are featuring paper number 2. It is available for download (free registration) here and you get the first paper too (just in case you missed that).

Our concept is modeled broadly on the principles and credos that successful firms such as Mars, Ikea and P&G use to define their philosophy and style. The best examples actually mean something and affect corporate behaviour in a positive way.  So, after careful thought, our five principles of sourcing are Coherence, Alignment, Rigour, Openness and Commerciality.  

In this new paper, we cover the first two principles – Coherence and Alignment. Coherence means applying an end to end logic and consistency to the whole sourcing process. That means understanding the aims and goals before you even start engaging the market, and having that “thread” running through all the stages of the process, including critical elements such as the evaluation methodology and process.

Alignment covers both alignment to stakeholders and to the market. Sounds obvious, and there will be few procurement professionals (we hope) who don’t understand the need for stakeholders to be signed up to and involved in critical sourcing and procurement activities.  But on the market side, how often do we try and source something that isn’t really what the market can best supply?

Anyway, here are our full definitions of our first two Principles from the paper.

Coherence

We look at sourcing as an end-to-end process that starts with early market engagement and runs through into the contract and supplier management phase. Different stages will be linked and all support the overall goals of the organisation and the specific sourcing exercise. The objectives will be visible to internal and external participants in the process, and each element of the sourcing process will clearly fit into the bigger picture.

Alignment

We will ensure that our sourcing strategies and activities are well aligned with the needs of our organisation and our internal stakeholders. That means understanding the business drivers in each case, whether cost, quality or other goals, and making sure our sourcing reflects those. We must also align with markets and suppliers, and work to resolve situations where the internal and external aspects are in conflict.

 

Please do download the whole paper for more insight – and we’d really welcome any comments about the whole “Principles” concept.

 

 

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