Services Procurement – How Well Are Supply Chain Practices Applied?

There are always great articles on our sister website, Spend Matters (US) and last week was no exception. Two took my eye in particular. We’ll come back to Apple and the issues with one of their suppliers tomorrow, but today, we are featuring Pierre Mitchell and his thoughts on services procurement – which fits with out “hot topic” for October but we just weren’t quick enough to pick this up last week!

Pierre asks whether services spending is really much more challenging than goods procurement? He gives a very good run through of some of the reasons why services are complex, echoing some of our thoughts from last month; for example:

  • Specifying requirements for people seems a bit more fuzzy than the form/fit/function specifications of widgets.
  • The scope of “services” is equally fuzzy. Services are not themselves part of a clean spend category – services are embedded throughout hundreds of other spend categories.

And he comes to the conclusion that “I think the answer is yes, it is much more challenging, but not just because of the inherent complexity, but also because it is so hidden and diffuse.”

He then goes on to suggest that in many organisations buying contingent labour for instance is “a bit of a mess.”

Yet this services supply chain seems to be managed at 2 Sigma – not 6 Sigma. And, in a services-based economy where companies no longer seem to want to hire full-time workers, the strategic management of contingent workers across this complex services chain seems pretty important, right?

Why can’t we take the lessons and good practices from physical supply chain management and apply them to services, he wonders? But rather than just whinge about it, Pierre is taking some real action.

I’ve teamed up with The Institute for Supply Management (ISM) and also with the Society of Human Resources Management (SHRM) to run one of our short snap polls (this one takes about 9-12 minutes) to gauge the problem.

We simply assess how well a few supply chain approaches/practices are applied to contingent labor (broadly defined). If you are a practitioner at a firm with more than 1,000 employees and someone who knows your supply chain well (or the contingent labor – or both!), we’d really appreciate your insight. The link to the poll is here.

The study is open for two weeks, (note; only to end of this week now), and then we’ll analyze the results and send them to the study participants (of course all responses are confidential and we won’t share your contact details with anyone).

Do read Pierre’s whole article here; and if you fit the target audience, please do complete the questionnaire – the results should make for interesting reading.

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