How can Global Sourcing be sustainable for Consulting?

Global sourcing is a procurement approach aimed at utilizing global efficiencies in the delivery of products and services.

Global sourcing, in a nutshell, is a “sourcing strategy” that coordinates the world’s most cost-effective production and operation inputs, such as workers, materials, machinery, technology, suppliers, engineers, and other essential facilities.

Key Takeaways

Are the advantages of global sourcing worth the effort? Global sourcing can be a powerful strategy for increasing efficiency and expanding into new markets. It is not, however, a technique that should be implemented with little consideration and numerous assumptions. 

To source globally or locally is a question that cannot be answered with a simple ‘yes’ or ‘no’ as far as consulting sourcing is concerned.

Leveraging the right expertise is critical in the consulting space, and, hence the location of sourcing often becomes secondary to what (expertise) you’re sourcing.

Consequently, global sourcing often is the only way to ensure optimum value from your consulting investment.

The question of sustainability is integral to the topic of Global Sourcing. Remote collaboration has opened up new way to blend global sourcing and sustainability in consulting.

Transcript

Hello and welcome back to Smart Consulting Sourcing, the only podcast about consulting procurement.

I am Hélène, and today we will be talking about Global Sourcing for Consulting. However, before that, let me give a recap of last week’s podcast.

Supplier Relationship Management (SRM), like any other area, is a huge topic for consulting services. The manner Procurement manages Consulting Providers should be consistent with the Company’s overall SRM policies.

Suppliers represent the beginning of the supply chain in any industry, and hence have a significant impact on following business activities. They not only offer you with the items and services you need to run your business, but they are also valuable sources of information and, guidance..

It is of course also true for consulting services. When you build a strong relationship with your consulting suppliers, they become “plug and play” as they know your industry, your business and your culture very well.

Listen to the complete podcast about Supplier Relationship Management.

However, this week, I want to discuss about Global Sourcing for Consulting.

Let’s start by Defining the Concept of Global Sourcing

Global sourcing is a procurement approach aimed at utilizing global efficiencies in the delivery of products and services. It is a centralized procurement method used by multinational corporations to achieve economies of scale through corporate-wide uniformity and benchmarking.

Global sourcing, in a nutshell, is a “sourcing strategy” that coordinates the world’s most cost-effective production and operation inputs, such as workers, materials, machinery, technology, suppliers, engineers, and other essential facilities.

Are the advantages of global sourcing worth the effort? Global sourcing can be a powerful strategy for increasing efficiency and expanding into new markets. It is not, however, a one-size-fits-all technique. It’s critical to consider how global sourcing fits into your company’s broader strategic plan.

Now the question is: how does it apply to consulting services? Let’s find an answer to this question.

Global Sourcing and the Consulting Industry – Do They Complement Each Other?

Coming back to the specificity of consulting, when you hire a consultant, you gain from the expertise in a given capability (strategy, operations, etc) in a given industry.

By the way, if you are curious about what are the different capabilities, you can listen to my podcast on this topic.

7 High-level Consulting capabilities category.

Hence the right expertise. But the funny thing is that the consulting industry has tremendous regional disparity as far as skills are concerned. For example, strategy specialists are more often based in the United States, while operations specialists, in particular, supply chain and procurement, are more often in Europe.

On step further, if we look at organization design. In the United States, org design is focused on the soft aspects such as organization effectiveness and is often linked to Human Capital consulting. While in Europe, and in France in particular, org design is focused on the hard aspects such org charts, job descriptions, and more linked to strategy.

You find a similar disparity in the industry experience. For instance, everybody knows that, in the United States, the consulting industry is mostly active on the East and the West Coast, with a small market in Texas. You find the same thing in the UK where most of the consulting market is based in the Greater London Area.

Now you won’t find the same industry experience everywhere. On the East Coast, you will find, shocking surprise, Financial Services & Pharmaceuticals. And on the West Coast, around Seattle, Aerospace. I wonder what large aerospace company is based there… Ah, right Boeing.

By the way, the same is true of France, where most Aerospace consulting is happening in Toulouse, 800km South of Paris, where Airbus has it headquarters.

Small consulting boutiques tend to settle close to their potential clients. Therefore, if you are looking for a specific expertise in Aerospace, you might have to look into Seattle or Toulouse-based consulting firms. Even the large consulting firms, even those who have international footprints, will have their expert teams in the local office.

Expertise Is What Matters the Most in Consulting Sourcing

When you are sourcing consulting services, the expertise often matters more than the savings you can make by sourcing locally. Because cost-efficiency in consulting doesn’t rhyme with offshoring. And if you are a regular listener of this podcast, you know I am not a big fan of terms like cost-efficiency. I prefer to focus on value. And in that case, value for money.

And that value comes from the technical expertise of the consultants (capability or industry experience), but also from the political expertise earned through cultural and socio-political exposure and so on. And the latter is very often local.

On some projects, you need your consultants to understand the language, navigate the local managerial etiquette and connect with local teams.

Why fly consultants from France for a project in Japan, when you can have a Japanese team with the same expertise and at lower costs (since you save the travel)? Doesn’t make sense.

So let’s go back to one of my favorite topics: you need to define your needs very clearly, including the non-technical aspects of the project!

Global Sourcing Versus Sustainability – What is the Big Deal? 

So now we know that sourcing in consulting can only be global. But how do we reconcile global sourcing and sustainable sourcing?

When it comes to building a sustainable procurement process, the conventional belief is that buying items as close to home as feasible is better for the environment than having a large supplier network. It’s simple to understand how and why this notion has grown in popularity.

The logistics of transporting products and raw materials across long distances have an obvious environmental impact: energy (typically fossil fuel) must be spent, contributing to resource depletion and carbon emissions. Furthermore, because overseas suppliers are not subject to the same restrictions as domestic producers, it is more difficult to regulate manufacturing quality.

Perhaps the most common example of this notion can be found in the food industry: In the way, people talk about food sources, the terms “local” and “sustainable” have become more linked and nearly identical.

Even within this business, however, the concept that items sourced from local producers are more environmentally friendly by nature is not entirely true with risks being oversimplified.

Talking about sustainability: Is global sourcing in general sustainable?

Sustainability, like procurement, is a complicated process that necessitates firms to evaluate a large number of variables — and with so many variables at play, the greenest choice isn’t always the one that’s closest to home.

The Guardian recently collaborated with Tesco, a British merchandiser and retailer, to organize a round-table discussion with other industry professionals on the issue of sustainable sourcing in the consumer goods sector. Tesco’s ethical trade director, Giles Bolton, discussed the complexities of green buying and how it influenced his company’s supplier network.

As a result, Tesco’s banana purchasing procedure has altered significantly. Rather than making its sourcing network more local, the store expanded its worldwide footprint, which was critical to the company’s long-term viability.

So, Global Sourcing Is Not Always An Antonym to Sustainability. And It Is True of Consulting

We all have heard the tales of consultants traveling all year long (in business class of course)… And I have seen some of my friends working 800km away from home, 5 days a week for several years.

But the consulting industry has been changing over the last 20 years. Consulting firms have been trying to embrace more diversity, and help their employees find a better work-life balance. And the pandemics that kept all of us working from home for several months has precipitated the move.

It is now possible to work mostly remotely. Virtual workplaces can help teams from all over the world come together and collaborate. Travel is then limited to the strict necessary. In a digital work indeed, global sourcing can be sustainable!

And that marks the end of our podcast, folks. Next week, I want to talk about The Consulting Industry in emerging markets. So, stay tuned.

Till then, stay safe and happy sourcing!

If you have other questions about Global Sourcing for Consulting, remember you can contact me directly on LinkedIn or by email because I am always game for a chat!

Bye and see you next week! Au revoir!

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Helene Laffitte

Hélène Laffitte is the CEO of Consulting Quest, a Global Performance-Driven Consulting Platform. With a blend of experience in Procurement and Consulting, Hélène is passionate about helping Companies create more value through Consulting. To find out more, visit the blog or contact her directly.

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