Tuesday, May 20, 2008

The Difference Between Hard and Soft Expertise in Global Sourcing Consultants

The Difference Between Hard and Soft Expertise in Global Sourcing Consultants
(Supply Chain Digest)

Many Companies Looking for Outside Help as Global Sourcing Volumes Grow, but Skill Sets Vary Widely; One Executive’s Check List

The explosion in globalization has, in general, exceeded the ability of most companies to keep pace with the people and the skills required to execute global sourcing strategies. As a result, there is robust interest in outside help from consultants in both the design and execution of global sourcing strategies.

However, one supply chain executive recently told SCDigest that there is a wide range of consulting talent available – and it’s important to find the right match for your needs.

More specifically, the executive (who asked that he not be named for this article) said if you are fairly well down the path, you are more likely to need and want “hard” consulting – real expertise – than “soft” consulting that deals more in general practices. “What I don't want right now are people with process maps, "best practices", sermons on collaboration, book checklists, etc.,” he said, referring to the softer variety of consulting skills in global sourcing.

So, what constitutes hard consulting? According to this executive, that would include the following types of capabilities:

• Knowledge of how to identify, qualify suppliers
• Commodity prices and trends, worldwide and different geographies
• Contracting globally (and best practices in contracts)
• How to assess risks and mitigation strategies
• Upside/downside management for global sourcing initiatives
• Government regulations and laws in different geographies
• Local content and "green" laws and compliance
• Various compliance regulations
• Knowledge of specific countries in question and their infrastructure issues, and these in comparison with others
• A really good ability to evaluate the true total landed cost of different sourcing alternatives
• Advantages and disadvantages of different geographies
• Industry sourcing trends (capacity investment, who is sourcing where, etc.)
• INCOTERMS – best for different supply sources
• Physical network designs – for cost, risk and market speed

“Now, granted, one person will not have all of this,” the exec added. “But a good consulting practices leader would know what to get and then build the group around this.”

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