Authored by Paras Sood
For many organizations, procurement functions undergo numerous transitions over their lifespan. Purchasing may originate reactively or tactically through stock purchasing rooms and localized buying, but as the procurement organization matures the driver swiftly becomes 'strategic sourcing' from the centre, identifying the best innovations from the supply-base, leveraging economies of scale.
But then comes the reversal... the impact of centralized sourcing is only answering certain supply management needs, but not responding to local demand and specialist requirements. Inevitably, control goes back out to the regions to prevent supply chain ostracism and keep the peace amongst end customers.
So where does the balance lie between centralization and decentralization? What is the role of regional / hub-based procurement professionals over their centralized strategic sourcing colleagues? What tools, processes and communications channels enable operational stakeholders to identify the best value from their procurement partners?