Rapid sourcing gives manufacturers the tools and techniques to be more flexible without undermining the relationship that they have with their suppliers.
With the holidays over, your team is returning to work well-rested, energized and motivated to chase new opportunities and take on new challenges. This energy and motivation will be critical to their success as they realize that the executives of the company, including you, will be required to reduce budgets and achieve significant cost savings in 2013. Accompanying the corporate cost savings goal will be specific savings targets across many or all divisions, requiring all hands to be on deck.
Supply chain—more specifically the procurement/strategic sourcing team—will be integral to not only reducing supply chain’s internal costs but also proactively supporting and partnering with other organizations to identify and achieve their cost savings objectives. Given that cost savings need to be realized in 2013, cost savings activities will need to be completed and executed prior to the end of the year. Traditional category sourcing initiatives with longer timelines will not be optimal in these circumstances and may bog down the speed-to-savings mandate. In situations such as these, a rapid sourcing approach will be more effective at achieving and sustaining cost savings without undermining the company’s relationships with its suppliers.
Rapid Sourcing vs. Strategic Sourcing
Whereas strategic sourcing employs a more rigorous sourcing methodology that focuses on optimizing category strategies and maximizing savings, rapid sourcing is purposefully less rigorous in specific, strategically-selected steps of the methodology to increase speed-to-value. The definition of value can vary, which is why it’s critical to understand how to employ a rapid sourcing methodology.
In the example above, value is defined as speed-to-savings across all sourceable spend. In other scenarios, value can be category-specific, such as a reduction in suppliers, increased spend on contract, or more insight to the total cost of ownership (TCO). Given the inherent variability of a company’s category structure, a flexible rapid sourcing approach that is value-driven and accelerates the speed-to-value will reinforce supply chain’s criticality to the business.
