Strategic Sourcing: From Periphery to the Core

by Mark Gottfredson, Rudy Puryear, and Stephen Phillips ( Harward Bussiness Review )

For years, “sourcing” has been just another word for procurement—a financially material, but strategically peripheral, corporate function. Now, globalization, aided by rapid technology innovation, is changing the basis of competition. It’s no longer a company’s ownership of capabilities that matters but rather its ability to control and make the most of critical capabilities, whether or not they reside on the company’s balance sheet. Outsourcing is becoming so sophisticated that even core functions like engineering, R&D, manufacturing, and marketing can—and often should—be moved outside. And that, in turn, is changing the way firms think about their organizations, their value chains, and their competitive position....

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