Earlier this week, international package shipping giant DHL announced that it was going to begin offering outsourced procurement services. This is a bit of a surprise given that DHL’s core competency is driving trucks and flying planes, but it is as equally intriguing.
Does it actually make sense that a company involved in moving materials should also be involved in ordering, routing, and perhaps even negotiating for those same types of materials?
Spend Matters’ Jason Busch shared a thoughtful perspective recently by blogging that shippers like UPS and FedEx “are one step closer to the movement and management of direct materials than the great majority of the procurement BPOs,” implying that this type of provider entering the procurement BPO market was indeed very logical. Jason cautions us “don’t think for a minute that [DHL will] be the last” of the big shippers to enter this market. I don’t doubt that Jason’s crystal ball may indeed be accurate. UPS has been offering procurement consulting services through UPS Supply Chain Solutions for a few years now, though it seemed to abandon the building of what was becoming an impressive whitepaper library.
What tempered my surprise a bit was that Xerox entered the procurement outsourcing market in 2008. Though I confess to not knowing all of Xerox’s capabilities, my perspective is that Xerox is further from a supply chain core competency than DHL. After all, according to this article on cfo.com, Xerox said that it got into the business simply because one of their clients “asked us to do for them what we’d done to them.”
Who’s going to be the next one crashing the procurement BPO party? Right now, it seems like there is no velvet rope and 300-pound bouncer keeping anyone out.
To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
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