I have seen several successful operations models ranging from extreme inhouse operations to genuine focus on core competencies. In the latter model, the company outsources as many things as possible to ensure the maximum scalability of business operations and processes. Many companies and company models can be found between the two extremes.
From Concentration to Swift Solutions in Procurement
A mere decade ago, large companies pursued extreme concentration of procurement with a group management model. Today, the tide is turning towards more swift solutions, where the acquisition processes and contractual jurisprudence cover the entire organization – regardless of how procurement has been organized. A swift model cannot be implemented simply by defining the rules and the contractual aspects – it also requires work and procurement professionals. In this case, it is the specialists’ task to promote and enable business operations. Not to search for quarterly price erosion from the suppliers, but to create shared opportunities in different stages of the business operation.
Business operations may already be on the rise in Finland as well. Change, at the very least, is on-going. Opportunities are revealed when old operations are phased out and new ones introduced. However, predictability has not improved noticeably and in many fields the cyclical nature of operations sets significant challenges for balancing the production, design, and procurement resources. Our ability to optimize resource requirements in changing situations goes a long way to determine the success of our company.
"It just means acquiring the right expertise when it is needed. No more, no less."
It would be simple to say that in the future we should handle acquisitions and purchases swiftly, on business operations terms. So why does it sometimes feel so complicated? Put simply, it just means acquiring the right expertise when it is needed. No more, no less. By using resource services flexibly, we can scale our operations up or down without continuous recruitment straining the entire organization. Take note that the utilization of resource services should be planned for ahead of time to ensure preparedness for different situations.
“When the Letter of Intent has been signed with the customer, there is no extra time left for the supply chain and planning.”
Fast-Moving Situations Are Particularly Challenging for Recruitment
Are specialists and resources available for balancing changing situations? Due to the seasonal nature, this may prove surprisingly challenging. For example, let’s consider a business project where an entire production facility is delivered to a customer. The sales process may take years, but when the Letter of Intent has been signed, there is no extra time left for the supply chain and planning. It is time to go! Project business always partly consists of customer-specific customization and as the volume increases, the buyer wants to ensure that the price of the product or service corresponds to the actual market price. Is the purchase team able to react to opportunities in urgent situations or continue to purchase from the same suppliers as before?
I encourage everyone to consider swift resourcing when you wish to ensure the availability of appropriate expertise when it is needed. Fulfilling promises to customers with large factory or technology projects often proves challenging on your own. Many companies utilize external services and specialists for planning, financial management, and IT services in particular. Often, we don’t even consider that the same would be possible for acquisitions and purchases.