Common thinking suggests that the more users of a supply management application the greater the results. Indeed, many an analyst report cites licensed or subscribed users as key success metric. (Even my own employer prides itself on ease-of-use and widespread user adoption.) However, my recent discussions with leading supply management organizations tell a different story.

Most companies begin their supply management solution initiatives ascribing to standard group think: the more people we enable and train on the system, the better results we’ll acheive. And while there is truth in this concept, without controls, such a broad approach can often result in inconsistent results.

Consider the experience of one large consumer products company. Its goal: have all supply management team members use e-sourcing for nearly all spend. The company employed a train-the-trainer approach, training more than 300 buyers on the e-sourcing system. They imposed a policy requiring use of e-sourcing for all sourcing opportunities greater than $100,000 in value.

In the first year of deployment, the company ran more than 150 sourcing projects online, negotiating double-digit cost savings for many categories. Sounds like a smashing success, right? Well, sort of. After an evaluation of its e-sourcing performance last year, the company uncovered three major issues with such a broad but decentralized approach:

1. Too many users: it was difficult to keep everyone fully trained and up to date on new features and approaches. And, despite their training, some users needed a lot of hand holding through the process.
2. Inconsistent approach and results: With e-sourcing execution at the local level, the company was challenged to provide sufficient oversight to ensure that lotting approaches and sourcing events were executed properly. Some e-sourcing projects were set up wrong and needed to be re-run. And varying e-sourcing event approaches confused some suppliers that were bidding on business with different units.
3. Variable knowledge: The company also found that it had a widely variable skill set across the organization with approaches being inconsistently applied by multiple users. 

In response, the company has centralized its e-sourcing efforts under a small team of experts that will manage all online sourcing projects for the company. Under the new structure, sourcing managers and commodity experts within the business units will continue to specify requirements and conduct supplier and market analyses. They will also report these specifications and initiate requests for sourcing projects using the e-sourcing systems. The e-sourcing team will take this intelligence and set up a detailed e-RFx, ensure proper lotting structures, and support and manage online negotiation events.

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