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As global supply chains become increasingly complex, large companies that rely on large number of supplier networks to execute mission-critical work are constantly at risk of losing capable capacity, continuity, and their competitive edge.
Many companies assign parts of the workload to different suppliers all over the globe, choosing based on expertise, availability, and need. These many locations and processes are managed by a Chief Procurement Officer (CPO) team.
Many large orgnizations, including the hypersclers and platform orgnization have up to 500 suppliers around the world. Managing a network of this size is incredibly expensive. As much as ten percent of the total procurement spend may go toward simply managing suppliers. The qualitative costs are equally significant. It can be incredibly draining for the CPO team or other individual to balance communication, coordination, and the risk that any supplier may go out of business at any time. And with supplier work directly affecting the final product, the pressure to deliver both quality and compliance is immense.
The immediate benefits of consolidation
For companies of this size, there are several key benefits to consolidating the supplier network by working with a strategic global partner with a wide range of capabilities, instead of a mix of one-off, specialized suppliers.
Consolidation puts far less strain on the CPO and dramatically reduces administrative overhead. Large partners are more stable and offer greater continuity, which minimizes time spent managing the relationship and searching for new suppliers if one goes out of business. A global partner will also have its own compliance systems in place.
Working with a strategic global partner with a wide range of capabilities, rather than a mix of one-off specialized suppliers, allows for rapid and diverse capacity expansion. That cognitive diversity translates to faster innovation and accelerated speed to market.
A consolidated future
Large companies secure greater value and execute a more efficient distribution of labor by engaging a strategic partner with extensive global resources.
Non-core functions are outsourced to trustworthy, cost-effective managed services, which are overseen by the strategic partner. The strategic partner serves as an extension of the company’s cognitive resources and deploys its own specialized professionals for more complex work that requires an expert. The company can then preserve its internal resources for high-level and sensitive functions. Additionally, the company realizes greater productivity, lower costs, and reduced management overhead.
This image shows two highways. On the left is a clogged roadway, with different types of vehicles disregarding road markings entirely as they compete for space. There is no room for acceleration, and if one vehicle must brake unexpectedly, many others may be at risk of collision. This is an illustration of a vast, scattered supplier network: The collective is disorganized, progress is slow, and one unexpected issue may have significant—and catastrophic—consequences.
On the right side is a representation of a consolidated supplier network. The purpose and intended user of each lane is clear, which eliminates clogging issues and dramatically accelerates everyone’s progress. This translates to more efficient execution of work, greater clarity on value, and faster delivery of completed work.
You won’t find anyone else like Quest Global.
Quest Global has a proven track record of effectively executing this consolidation model for our clients. We have delivered savings of 20% to 50% through consolidation, with some customers saving up to $10 million per year.
Quest Global is an operator-led company, rather than a leader-operated company. Our decentralized model empowers individual business units to make decisions in a joint-governance model with our clients. Rather than forcing you to wait for multiple layers of corporate approvals, Quest Global partners with you to expedite innovation.
We have a vast network of multicultural teams in key geographies that are rich in engineering. When you work with Quest Global, you can leverage our global footprint while executing locally with teams that look and feel like you.
Quest Global has partnered with customers in successfully developing and implementing consldiation and delivering savings and value. Quest Global has proven, repreatble playbook to execute such consolidations and know the trasps that needs to watchout for while executing the consolidation.
Quest Global is the most trusted partner to solve the world’s hardest engineering problems, and we are committed to your success. We deliver high-value solutions throughout the entire product lifecycle and advance your business model to achieve engineering transformation.
