Sourcing as a Value Center: Winning with Technologies
2018 marks the 12th anniversary of the Kurt Salmon, Part of Accenture Strategy and Apparel magazine partnership for assessing the global sourcing market. This year’s study incorporates the survey data and results from more than 160+ companies (Figure 1) with strong representation from both retailers and distributors. The current global apparel sourcing market is one of rapid developments because of macroeconomic factors, increased competition, and advancing technologies. The survey responses were analyzed to determine what it means to excel in global sourcing and identify key trends shaping the apparel sourcing landscape especially those in the applied analytics and technology space.
Last year we highlighted the need for a transformation of the Sourcing organization from a cost center to a value center. Being a value center means that sourcing is not only responsible for getting products to the shelf, but also for helping get products off the shelves by driving speed, consistent quality and by helping limit liabilities. While there is internal pressure on sourcing to assume a stronger position as a value creator within retail organizations, macro-economic factors continue to increase the complexity of global trade on both the demand and supply sides and continue to challenge the sourcing teams to reinvent traditional ways of sourcing.
Looming trade wars and increased product costs catalyze the shift from traditional sourcing base to newer sourcing geographies, putting additional pressure on sourcing organizations to have cost efficient product creation and sourcing processes. At the same time these organizations are under pressure to deliver on consumer needs, which mandates the need for faster rate of innovation as part of supply chain as indicated again in this year’s survey responses (Figure 2).