Accessibility Links

Sourcing is a Science

Date: 24 January 2019

The Evolution of Sourcing

As the web of global procurement continues to expand and evolve, so too are the methods used to obtain parts, supplies, and services at optimal price points. Gone are the days of instinct or precedent that made the job somewhat predictable and stable; today’s sourcing specialists must have skills, both tangible and intangible, to help their companies improve their bottom line.

A Supplier’s Market

One of the factors contributing to this sea change is a new dynamic between supplier and buyer. Modernization of the developing world has been a boon to the populace of these countries, allowing many to rise out of poverty, increasing their ability to seek goods and services beyond the essentials. According to the World Bank, over the last 25 years, more than a billion people have been lifted out of extreme poverty, and the global poverty rate is the lowest in recorded history.

“From a supply chain standpoint, this means there are more businesses and groups competing for materials. This has turned the tables, allowing suppliers to be more selective in who they deal with and the prices they are willing to negotiate.” said Jason Newby, Recruitment Consultant at DSJ Global. 

Therefore, a need to effectively build a strong partnership with suppliers has become vital to the success of a procurement function within a company. This is best illustrated in the results of a recent Gartner survey, where 70% of respondents said collaboration or relationships with suppliers is one of their top strategies for the new year.

The Rise of Technology

Along with societal development, innovations in technology in the last couple of decades have made communications and shipping much more efficient. The emergence of the internet connected the world making sourcing, procuring, and monitoring much easier via email, chat, and video. Automation of tasks and new machinery has allowed both volumes to increase, and transit times to decrease.

The latest iteration is the creation of the Internet of Things (IoT) coupled with the Industrial Internet of Things (IIoT). This technology has allowed various mechanical components to “talk,” sending and receiving data about elements of the supply chain in real time, helping further communication and efficiency.

The unprecedented amount of data collected, stored and dispersed has lead to the development of the field of big data analytics. As more companies adopt the IIoT, it is expected to go to almost $124 billion by 2021.

“An ongoing trend which we have observed in the market recently is that companies are investing in vendor management initiatives to put greater focus on supplier collaboration.” said Newby. 

Global Political Tensions Rising

Adding a layer of complexity to supply chains is the global political landscape. In the United States, the current Administration has begun imposing tariffs on imports, most notably China, but even longtime allies such as Canada and the EU have been hit. Elsewhere in the world, rising tensions in the Gulf States has the potential to affect the price of oil which can send ripple effects through every industry.

“This climate has created a lot of uncertainty in pricing and caused companies to be more adaptive or proactive in their sourcing or procurement,” Newby said.

A Strong Demand for Sourcing Talent

Because of these changes, today’s procurement professionals need to have a variety of new skills. They must know how to interpret big data analytics and be able to use the information to find the leverage (taking into account total cost of ownership), or anticipate disruptions of supplies or services.

They must also understand and be able to navigate the market on a global scale.  Companies are seeking individuals that speak multiple languages and understand cultural variations in order to cultivate relationships that are stronger than their competitors. 

Finding the qualified talent with this skill set, however, is proving quite a task. These individuals are highly coveted by the world’s largest corporations who have deep pockets and pay top dollar.

“I was actually speaking with a hiring manager this morning about how difficult it is to find individuals that are proficient in negotiating with major software service providers and managing the ongoing relationship,” Newby said.

As the world has changed, so has its supply chain. Procurement professionals must understand how to adapt and navigate by leveraging technology and analysis as well as other skills. “Bottom line, sourcing is now more of a science,” Newby added.

Working with a specialist recruiter can help organizations secure this highly valuable, and hard to find talent. DSJ Global's recruiters have a robust network of connections within their industries, and are able to source both active and passive talent for theirr clients. Get in touch with the DSJ Global team today to learn more about how we can add value to your organization in this rapidly changing talent landscape.