Eighth BearingPoint Sourcing Monitor highlights purchasing directors’ increasing influence in company strategy / Global trend of reducing emphasis on low cost country sourcing
Amsterdam, June 30, 2014 – Organizations are fundamentally redesigning the way they engage with suppliers as the focus turns from cost reduction to the value-add suppliers can provide.
New research from management and technology consultancy firm BearingPoint, in collaboration with ESSEC group and Novamétrie, shows that although cost reduction remains the number one driver for supplier network transformation (56%), the value suppliers can add is gaining in prominence with seeking know-how (16%) and risk management (15%) being the second and third.
This comes at a time when the transformation of the supplier network is brought into the corporate strategy of 65% of companies surveyed and 67% believe the transformation of the supplier network is a source of growth to companies.
Matthias Loebich, Partner at BearingPoint and firm-wide leader of the supply chain management team, said: “The potential for major gains means there is increasing influence for purchasing departments within businesses. These departments have an unprecedented opportunity to shape the evolution of the company through the suppliers on which it depends.”
Jérôme Courgeon, Director at BearingPoint and co-author of the report, continued: “The most successful purchasing directors will recognize that sourcing suppliers is not all about cost reduction. There are other areas where suppliers can make significant contributions, such as local knowledge and risk mitigation.”
The research reveals stark differences in the prominence placed on purchasing departments across Europe and China:
However, budget remains tight for purchasing directors, with 32% stating budget constraints as the main obstacle to supplier network transformation, more than any other reason. In effect only 15% of purchasing directors consider to be fully contributing to the transformation of their company.
This year’s survey shows an exact split in local versus global sourcing strategies (46% each). Moreover, 63% of those surveyed consider more than 50% of their suppliers to be local.
This reflects a global trend of reducing emphasis on low cost country sourcing, with only China bucking the worldwide trend of prioritizing this (54% compared to a global average of 22%).
The Sourcing Monitor, founded in 2004 by BearingPoint, Microsoft, Essec and Novamétrie, presents its eight edition of state-of-the-art practices, organization and trends within the Purchasing function in Europe and Asia. The study includes research from France, the United Kingdom, Ireland, Germany, Austria, Switzerland, Finland, Norway, Denmark, Sweden and Russia as well as China. The study was conducted between September 2013 and February 2014 in two phases: first a quantitative study consisting of 502 telephone interviews with Purchasing directors based on a questionnaire; secondly, a qualitative study of over 50 face-to-face interviews with Purchasing directors in each target market and across a variety of sectors and company sizes, gaining insight into their perspectives.
The ESSEC group, École Supérieure des Sciences Économiques et Commerciales, founded in 1907, is a major world player in management training. Teaching is by internationally recognized research professors and renowned business leaders. Together, they carry on the tradition of academic excellence, promote individual creativity and build character and the spirit of group openness in the service of economic and social activities.
For more information, please visit: www.essec.com
NOVAMETRIE is an institute specializing in strategic studies for opinion leaders. The institute offers globalized and holistic interdisciplinary methodologies, integrating the quantitative aspect and the qualitative approach. The Novamétrie Scientific Committee, composed of academics and experts, offers an innovative operational and strategic vision, from designing research to effective recommendations.
For more information, please visit: www.novametrie.com
BearingPoint consultants understand that the world of business changes constantly and that the resulting complexities demand intelligent and adaptive solutions. Our clients, whether in commercial or financial industries or in government, experience real results when they work with us. We combine industry, operational and technology skills with relevant proprietary and other assets in order to tailor solutions for each client’s individual challenges. This adaptive approach is at the heart of our culture and has led to long-standing relationships with many of the world’s leading companies and organisations. Our global consulting network of 9,200 people serves clients in more than 70 countries and engages with them for measurable results and long-lasting success.
For more information, please visit: www.bearingpoint.com
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