REPORT
On February 14, ESADE Alumni hosted another Refresher Programme talk; ''The management of external resources: strategic sourcing'' by Professor Ramon Sagarra, academic collaborator in ESADE’s Department of General Management and Strategy.
Professor Sagarra began by analysing today’s economic scenario and explaining how important it was for companies and managers to develop their talent and capabilities with a view to increasing their long-term competitive edge. Sagarra insisted that a company’s profitability was directly related to its effective use of its in-house resources and also the external resources provided by its network of suppliers.
''Cost cutting continues to be the most important factor. Anyone who tries to convince the management to pay higher prices, regardless of quality, will probably end up on the street,'' he warned the audience before insisting once again on the need to optimize spending – an essential aim in any company.
However, another management goal and strategy is to transform ones company into a supplier’s best customer in order to ensure more bargaining clout. In this respect, Sagarra mentioned the importance of strategic sourcing, i.e. a methodology intended to reduce the overall cost of materials, goods and services by pinpointing the best types of supply offering the best quality for the lowest price and choosing the most suitable suppliers.
''When choosing a supplier, it is essential to be very careful and to analyse their standing and solvency,'' the professor recommended. It is important to be aware of these risks and handle them as effectively as possible.
Strategic sourcing is more than just procurement. It is a radical transformation of the traditional purchasing model into the management of external resources, an area that creates value and closer contact with suppliers. Strategic sourcing gets suppliers more involved in the business model and the company’s particular needs, and this adds value. Strategic sourcing is thus defined as the acquisition from external resources of goods, services and the knowledge and innovation needed to create and maintain the company’s competitive edge.
But who takes care of managing a company’s external resources? No one in particular. It is, therefore, necessary to organise this task within a well-defined framework. Strategic sourcing calls for a manager with business acumen able to see look beyond cost-benefit assessments and, by understanding the company’s real needs, ensure the best solution the market can provide.
Sourcing managers are responsible for matching corporate needs to the capabilities of suppliers, and this calls for the creation of a plan which integrates the company, knowledge of the supplier market, and the ability to reduce and streamline purchasing and other processes immediately. Their main management qualities are their business outlook, and their ability to work in teams and attract talent. In short, a shift from purchasing manager to sourcing manager fully capable of dealing with corporate management.
The transformation of a traditional purchasing division into a sourcing management model is not an easy task. The firm’s managers must be familiar with this approach and willing to throw their weight behind it. They must also take into account what it will contribute to business and its immediate and long-term impact. In short, management planning is a must if the specified goals are to be attained.
Programa
You are invited to the ESADE Alumni Refresher Programme talk, ''Outsourcing management: strategic sourcing'' by Ramon Sagarra, assistant professor in ESADE’s General Management and Strategy Department.
A company’s returns are directly related to its effective use of its in-house resources and the external resources provided by its supplier network. The aim of strategic sourcing is to ensure that the company gets as much value as possible from its suppliers.
On the other hand, a company’s competitive edge depends on its ability to give customers maximum value at the lowest possible cost. A company’s outlay is what it spends on purchases plus wages, therefore outlay optimisation depends on purchase maximisation. But who is responsible for managing external resources? This responsibility is, in fact, spread throughout the company.
The strategic sourcing model used in outsourcing management requires managers with business acumen and a value-for-money approach able to achieve more than just a good supply service: managers who work like business partners and can find the best solutions in the market.
The transformation of a traditional purchasing department by applying an outsourcing management model requires a firmly committed management team. MTo ensure effective implementation, managers must understand the strategic sourcing model, its contribution to business, and its impact on change and the company itself.
Ramón Sagarra
Academic assistant in ESADE’s Department of Strategy and General Management. Chemical engineer (IQS) and industrial engineer (Universidad Ramon) and Degree (IESE).
ACADEMIC EXPERIENCE
• Director of Master in International Purchasing, Ramon Llull University
• Director of Diploma in Sourcing, Adolfo Ibáñez University, Chile
• Director of Master in Management of Industrial Companies, IQS
• Chairman of chair in Strategic Sourcing, UAI Santander, Adolfo Ibáñez University
• Associate Professor, URL
TEACHING EXPERIENCE
• Spain: Endesa, Santander, Ferrovial, BBVA, Repsol, FCC, GNF.
• Latin America: UAI, University of San Sebastian, Bio-Bio, Concepción (Chile), Inalde (Colombia), Austral University (Argentina), TEC Monterrey (Mexico)
PROFESSIONAL BACKGROUND
• CEO Barcelona Activa and Managing Director of Economic Promotion, Barcelona City Council
• Managing Director of Marketing and Sales, Roche
• Area Manager, Boehringer Ingelheim
• Division Manager, Henkel
• Nalco Chemicals Manager for Northern Spain and Chile
• Process Engineer Induquimica. Cepsa
For further information:
esadealumni@esade.edu
Language: Spanish
