Supply Excellence — What’s Next According to Busch: Supply Skills Networks

What’s Next According to Busch: Supply Skills Networks

August 29th, 2006 · by Tim Minahan · No Comments · skills rectruitment and development, supply management

Last week, I shared my contribution to Michael Lamourex’s pet project to get industry thought leaders to predict the future of strategic sourcing and supply management. Other contributors to the initiative include Michael, who is blog master for Sourcing Innovation, Procurement Central master Dave Stephens, David Bush, author of the e-Sourcing Forum. But it was Spend Matters master Jason Busch’s predictions of supply innovations that will spin off the On Demand delivery model that piqued my interest.

Going beyond the supply market intelligence and sourcing category templates suggested in my own hybrid sourcing model prediction, Jason suggests that the network-effect of On Demand application delivery will foster sharing of sourcing and category skills and capacity between companies, very much like semiconductor manufacturers now share fabs.

“Consider how an On Demand platform could enable the creation of virtual shared services between organizations based on processes, skills, and availability,” writes Jason. ”A castings category manager from a non-competitive automotive company could identify and work with her counterpart from an industrial manufacturer to share or barter processes, information, and even available capacity and on-the-ground global resources through an On Demand application or hub.”

Jason says this innovative “skills punch-out” model is “made possible entirely by On Demand capabilities,” which as described in detail here rely on flexible application functionality, content, and services delivered as a pay-as-you-go shared service.

Considering the talent crunch for skilled commodity and sourcing experts, Jason’s concept is particularly intriguing and well-timed. CPO’s continually complain to me of competitors and internal departments poaching their top players and recent studies from Purchasing Magazine, ISM, and Denali Consulting place talent recruitment and retention among a supply management executive’s top challenges. Sharing category expertise or sourcing “capacity” could prove a plausible antidote to the talent shortage. This model could also accelerate attempts by resource-strapped mid-sized firms to improve their supply management performance.

One of the more intriguing aspects of Jason’s shared-skills concept is that it could also present new opportunities for top-performers to turn supply management into a revenue-generating profit center. In fact, some companies are already ’sharing ‘ their sourcing and category expertise and operational procurement capacity and systems infrastructures as part of new for-fee procurement outsourcing offerings.

IBM is probably the best example of this phenomenon, with its internal category experts and procurement operations personnel doing double-duty as the arms-and-legs of its procurement outsourcing business. Big Blue has recently expanded its shared-services offerings to market and deliver a wide range of supply chain and logistics services, including international purchasing office (IPO) support in low-cost regions, such as China. Other manufacturers, such as Hewlett-Packard and Ingersoll-Rand, have similarly tried to build a business from their supply management organizations to lesser degrees of success.

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