Sourcing Strategy Market Intelligence is Only a Click Away

An article in the September issue of Inside Supply Management, entitled “Market Intelligence Matters,” compelled me to think about the reasons why we manage the supply chain proactively and develop sourcing strategies.  Fundamentally, we engage in these activities to ensure that our businesses can continue to provide world-class goods and services in a global marketplace.  Moreover, we want to demonstrate that purchasing adds significant value to our organizations.

In his article, Joseph Mullan references some market intelligence best practices:
• Supply market analysis
• Category intelligence
• Supplier health performance
• Financial planning
• Risk mitigation

Each one of these techniques is not inherently new to sourcing.  In fact, the classic ‘Six Step’ strategic sourcing processes and its derivatives call for these data collection and analysis approaches early in the game.  The fundamental difference these days is the level of Internet-enabled tools that are available to the sourcing manager during the investigative stages.

So, where do we look first?  Mullan and others argue for an “inside-outside” approach.  Looking inside, what information could your accounts payable and/or credit group have on your current suppliers?  Did they run a Dunn & Bradstreet or alternative report to characterize your suppliers’ financial positions and potential pricing and product strategies?

From there, you can look at U.S.-based Internet sources. The U.S. Census (www.census.gov) and The Bureau of Labor Statistics (www.bls.gov) are my favorites for industry-specific information.  Lesser known sources, like the U.S. Treasury (www.treasury.gov) and U.S. Department of Energy (www.ela.gov), contain some useful cost-forecasting information, especially as it pertains to commodity inputs to the producer price index (PPI).  As many know, the PPI is a great pricing ‘leading indicator’ to monitor as a part of a commodity sourcing strategy.

Lastly, look at non-governmental organizations and search through their databases for industry- or country-specific forecasting data.  Organizations like the World Bank (www.worldbank.org) and Organization for Economic Development (www.oecd.org) do an excellent job of providing statistical trend information for many countries in aggregate, and for specific major industries within those countries. 

Note that the sites listed here are all free sources.  In my experience as a Sourcing Director, I find that these databases are as good as, if not better than, most ‘for fee’ databases, especially for the first step in a Six Step strategic sourcing process.  They will consistently point you in the right direction ¬– to a solid commodity strategy that adds value to your organization.

Still quiet here.sas

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