Sourcing Offices Will Remain Key.  Here’s Why.

Sourcing Offices Will Remain Key.  Here’s Why.

 

5′ read time

 

This is part three in our four part series on sourcing in modern times.  To read the other parts in the series, go here.

 

In March, at the Made In Asia conference – the largest sourcing symposium in Hong Kong – the attendees listened to a plethora of different keynotes from many different business leaders.  But one speech has resonated long after the end of the event. You may have heard the phrase before, now repeated often in sourcing offices and the industry at large: “Sourcing Is Dead.” This phrase, echoed over and over during the speech, was not the crux of the argument, it was the antithesis.  The point being made was the same one we have made so far in this blog series: Sourcing isn’t dying, it’s changing drastically and fast. Which means that sourcing offices won’t die either. That is, unless they fail to adapt to the changing environment. The future of the modern sourcing office lies in its ability to change and adapt.

 

We have covered in some of our previous posts exactly why sourcing is changing – the instant gratification of end consumers and the rise of the Amazon seller have made the traditional methods of finding completed products effectively obsolete (for more information on this, see the first blog post in this series here). These changes are providing new, sink-or-swim style challenges for sourcing offices as well.  Edwin Keh, CEO of the Hong Kong Research Institute for Textile and Apparel, summarized this problem best:

 

“In the past the role of many sourcing offices was simply to buy goods and make sure these goods were actually shipped. Today, its role is much more complex, since buying offices find themselves dealing with quality standards, ensuring design and manufacturing specifications are accurate, as well as compliance, legal and tax issues.”

 

That complexity is further compounded by geo-political changes. Sourcing offices have traditionally benefited from China’s low labor costs and relatively lax regulatory environment, but even those benefits seem to be changing, forcing the most globally elastic sourcing offices to shift toward the developing world – places like Thailand, Vietnam, and Cambodia. The ones who have already moved away from China have clearly seen the future, and will find themselves at an advantage as China starts to tighten its laws and increase worker value.

 

But how can your sourcing office best adapt to this new world order?

 

The first and most vital change that needs to be made is a change of mindset.  Where a sourcing officer’s role was once a largely administrative function, it must, out of necessity, become more integrated with the business.  Sourcing officers will need to change their focus from one of procedure, to one of quality control, supply chain management, product fit, and unique design.  The sourcing office must be “another department” no longer, and shape itself as a core element of business functionality.

 

Second, rather than looking at relationships with suppliers as a simple exchange of goods for money, with no trust, or interest in establishing real connections, the sourcing office must look toward securing long term partnerships with its suppliers.  The central role of a sourcing office is, by the very nature of the shifting environment, moving toward one of true innovation. This means strong understanding of customers, and a proactive approach in understanding exactly what is needed in your products to make your customers lifelong ambassadors.

 

Finally, it is absolutely vital for sourcing offices to find ways to speed up the purchasing process while at the same time improving the value to the end user.  The most obvious first step to achieving these goals is complete process digitalization. By continuing to source products manually, you add far more steps than are needed into the process, guarantee redundancy, and increase costs.  There may be a “Tsunami of data coming at us” as Mr. Keh has mentioned, but it doesn’t have to be overwhelming. You just need the right systems to do the heavy lifting for you. And make no mistake, you are the one that has to make this change.  Manufacturers, especially Chinese manufacturers, have no interest in improving processes on their end. They do well enough the way things are now that they see no reason to adjust. This digitalization trend may move its way down the pipeline and force those manufacturers to change eventually, but you don’t have the convenience of time.  It has to be now, or you won’t be able to keep up with the revolution.

 

The revolution we keep mentioning is happening now. Sourcing offices have to jump in the mix and change the way they operate. Whether it’s been brought into the fold of the business yet or it’s still just some small administrative branch, the sourcing office, and the people that work there, can bury you if these changes aren’t made. Transform the way your buyers think, transform the way they operate, digitize your processes, and keep yourself successful.

Why Your Sourcing Team Is Bigger Than You Think

Why Your Sourcing Team Is Bigger Than You Think

 

6 minute read time

 

This is part two in our four part series on sourcing in modern times.  To read the other parts in the series, go here.

 

The rise of Amazon has left the Sourcing industry in a panic. Cries are heard from every direction of “sourcing is dying!” and “retail is a thing of the past!” These bombastic statements conjure images of the trampling hordes from Genghis Khan’s army, or a proverbial hurricane, just off the coast, about to make landfall. But sourcing itself isn’t dying, it’s undergoing a massive and rapid change.  And with it, the way you source must change as well. Your process has to become less about finding products, and more about finding the resources you need to create unique products. You already have a bigger product team than you think you do, you just need to figure out how to best restructure your process to include internal and external players. This leaves us with two distinct, and equally difficult, questions to answer:

 

  1. How big is my product team really, and how can I leverage them to get the most out of their individual expertise?
  2. If I include everybody, as you say, how can I make sure that I’ll actually be productive? This could turn into a disorganized mess!

 

Your Giant Sourcing Team

 

You may have several people in your organization that refer to themselves as merchandisers, or whose job specifically includes visiting trade fairs and making purchasing decisions, but just because they are on the front lines does not mean they make the decisions alone. Nor does it mean that a transition to creating products is a burden only they bear.  Marketing has to ensure product-market fit, sales is on the front lines of user feedback, and even finance can advise whether the budget is on target or not. The fact that all these different groups are involved so heavily in every purchase should already help you see that the merchandising department isn’t a lone wolf.

 

Sourcing in the new world is a strategic function, more than ever.  There is a real competitive element to proper sourcing, and your business can float or fall depending on how well you do it.  This means that, much like marketing, sales, and finance, it needs to be seen as an integral part of the strategy of your business, and synergies need to exist between the merchandising department and every other vital area of the business. And lucky for you, there is an easy solution: Acceptance is the first step toward healing.

 

Once you have accepted the state of things and elevated the importance of sourcing in your industry, the next step is to bring every other department into the sourcing process.  Each different voice will provide a different perspective for how to improve your products, and by extension, your business. Use your marketing department to understand the latest trends, and to predict where your industry is going in the future.  Use sales to tell you what clients have said in the past about your products, and use that as inspiration for your newest creations. Use IT to talk about the technical feats that might be necessary to accomplish your goals, and the feasibility of them.  

 

While you consolidate internally, consider also strengthening your supplier network.  Moving toward creating your own products does not mean eliminating your suppliers. To the contrary, it means strengthening your relationships with a core group of them.  Your supply needs will certainly change, and it is going to be important to have a great relationship with the suppliers you really need, rather than intermittent purchasing from hundreds of different groups.

 

These two elements taken together, greater involvement in the sourcing process by your entire team, and stronger supplier networks, become the single most important way to ensure that any product you create is the best it can be, so that it hits the market in the best possible shape.  Which leads us to our next question: How in the world does this not become a “too many cooks in the kitchen” style problem?

 

Keeping Yourself Organized

 

The first thing you can do to quickly adjust to this new management style is a simple exercise in slashing fat.  Draw out your sourcing process on a sheet of paper. Make sure to include every detail of the way that a potential product moves through your company.  Then look for redundancies. Do you need two separate teams to review the product at two separate times, or can that be done together? Can you combine any sessions? Any testing that takes too long?  Make your sourcing process as lean as possible, and you can have as much feedback as possible with the least time needed to get your product to market.

 

Ok, so now that you know your strengths and weaknesses, how do you keep everything organized? There are hundreds of PLMs out there, but they all cost a fortune, take far too long to implement, and have a lot of bells and whistles you will never use. If you’re approaching this problem holistically, you know that slapping some expensive service on the top of your current process will only make things worse.  Lucky for you, you’re educated enough at this point to know how to assess any tool presented to you. So let’s talk about the strengths and weaknesses of some of the industry’s top performers

 

Slack. No denying this is a communications giant for the business world.  But at the end of the day, that’s all it is. Slack is great for keeping up to date with your colleagues, exchanging information, and staying on top of your work.  But there’s no way to streamline any processes, or even build out tasks through the service.

 

Trello. Trello is a kanban in its purest form.  You build to do items, assign team members, and move your items between columns.  But Trello, while overall a great tool, can sometime become a jumbled mess – difficult to keep track of information.  And with so much information in the sourcing world, you just can’t afford the time it would take to search.

 

ShowSourcing. This solution resolves every sourcing problem you commonly have. Products that you can easily find, update, and enter information about seamlessly? Got it. A way to easily collaborate with your entire workforce about the status of products in the pipeline, get feedback and vote? Got it. A robust supplier network, so you can get quotes and build out your sourcing processes? Got it!  ShowSourcing really checks all the boxes.

 

You can leverage the knowledge and skills of your entire company, but you have to do so intentionally with a plan to simplify and the right tools to help guide your way.  This sourcing revolution means big changes for the industry, but it certainly does not mean sourcing offices are going the way of the dinosaur. They are still going strong.  And we will tell you in the next article why things are going to stay that way.

 

Product Sourcing Is Dying. Here’s How To Adapt

Product Sourcing Is Dying. Here’s How To Adapt.

4 minute read time

In 2017, around the time ShowSourcing’s app was launching, people were still taking notes with pen and paper, frantically discussing products with their teams until all hours of the night, and their product pictures were jumbled in the photo albums of their phones. If this was the state of the industry in a modern age, we thought, it must not be moving very quickly.

Continue reading “Product Sourcing Is Dying. Here’s How To Adapt”

6 reasons to use a PLM to digitize and automate your sourcing processes

6 reasons to use a PLM to digitize and automate your sourcing processes

3’45 reading time

reasons to digitize your sourcing

Digital sourcing has been a growing trend in 2017, and is not about to stop. It doesn’t matter the industry your company is active in, the competitive landscape has been changing and digitalisation of processes is an answer to the threat. Because digitizing your sourcing strategy means leaner processes and shorter lead-time, it’s 2018 answer to maintaining your margins against your competitors.

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Why Amazon sellers should enter the Amazon EU market and how to be successful at it

Why Amazon sellers should enter the Amazon EU market and how to be successful at it

TL;DR – or why you should read this piece: Amazon is the largest e-commerce platform, it’s responsible for over 60% of the online purchasing growth, worldwide. Whether a small retailer or a hobbyist seller, establishing a shop on the Amazon Market Place simply makes sense. Here are the first steps to be amongst the most successful Amazon sellers.

Why should amazon sellers enter the EU market FBA

Amazon is a giant e-commerce platform with billions of dollars flowing freely through it. Customers love getting packages direct to their door, and purchases from Amazon have become so common, it is now a household name. This remarkable platform operates in as many as 180 different countries, and is responsible for over 60% of the online purchasing growth, worldwide.

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