What Capabilities Do You Need To Operate in a Global Market?

October 9th, 2007 at 07:51am David Bush - Iasta

In this post I summarize the fourth installment of the CPO Agenda debate series - What Capabilities Do You Need To Operate In A Global Market? that took place in Milan in the Spring. My summaries of the previous debates on World Class Procurement - The British Perspective, Global Sourcing - A Scandanavian View, and The Next Wave of Savings are still archived here on eSourcing Forum.

The debate included Danilo Augugilaro of UniCredit, Stefano Baghetti of Alenia Aeronautica, Paolo Cova of LeasePlan, Giorgio Diazzi of Siemens, Luca Guzzabocca of GlaxoSmithKline, Lorenzo Laurelli of EMEA/Emptoris, and Paolo Mondo of Accenture. As with the last post, I am going to summarize some of the key points from each contributor.

Danilo Augugilaro
e-Auctions have an advantage in terms of opening up the market to foreign suppliers, because the process (when executed appropriately) provides a level of transparency and trust.

Stefano Baghetti
When creating your business plan, you need to consider not only the final costs of the products you buy from suppliers, but also your own costs in monitoring their activities, especially if they are located in a low-cost country. It is important to develop reliable suppliers and to find people inside your company who can develop this co-operation.

Paolo Cova
Leveraging scale and improving the professionalism of procurement at both an international and a local level is one of the keys to profit and competitive advantage in the future. You can better leverage scale if your fulfilment partners are able to leverage it as well. This means, for example, that you have to find international companies able to deliver the services you need and establish partnerships with them. Consider splitting your spend into commodity groups and organize international procurement task forces for each group, composed of representatives from the different companies you operate in or buy from.

Giorgio Diazzi
The real challenge today is to understand what should be done globally and what should be done locally, and how we can get suppliers to provide the right level of service at the global level. Also, today we need people with real international experience, flexibility and competence in process procurement and project leadership.

Luca Guzzabocca
The key critical success factor is to get people skilled and prepared to approach a different environment and to work in teams. Also, you need a clear sourcing process that involves all the stakeholders from different functions. It’s about facts and data. And not just looking at the short-term benefits, but also the medium and long-term impact.

Lorenzo Laurelli
It has to be clear what the strategy is within the purchasing organisation. And, used effectively, technology can push changes in an organisation, streamline the process, bring savings and keep real value within the company.

Paolo Mondo
A global approach should involve the whole company is because you have to take a total cost approach. Also, buyers must have a much broader set of skills and competencies, from technical aspects to financial aspects.

Now, I may not be an expert in globalization, but skilled people, teamwork, the right tools (especially e-RFx and e-Auctions), a solid strategy, total cost of ownership (enabled by decision optimization), leverage of scale (enabled by spend analysis), risk management, good supply partners …that just sounds like good sourcing to me!

Entry Filed under: General, Global Supply Issues/Risk, Interviews, Supply Management Best Practices, Technology

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