Cheap Sourcing - is it the New Purchasing Game in Town or is it the Most Ancient Practice on Earth

by Osama El-Kadi - Date: 2007-01-21 - Word Count: 620 Share This!

I was invited to participate in a round table discussion along with senior colleagues from the largest procurement organisations in Europe. The moderator of the forum asked a question to all the attendees:" what are your views on the latest thinking in procurement organisations - Cheap Sourcing". People started answering while highlighting their experiences and the advances they have made into this new trend in Procurement.

I felt a bit strange at the question and being a Chief Procurement Officer myself, I felt a bit embarrassed that I have never really given this "new" the importance it deserves or even though about it much. I must be totally incompetent as a procurement officer since in such an important forum a question like this is being put forward to the participants, or am I outdated and not keeping up with the latest trends and technologies in procurement?

While the others were answering the question each in his own way, I scratched my head thinking to myself, well I do make good deals for my company, and in fact our deals are one of the best deals in the industry. We do search the globe for the best price and quality while focusing on continuity of supply to secure the company. The problem I have is that I never thought I was doing something extra ordinary or even implementing the latest "buzz" in the procurement industry.

I didn't think either that this was modesty on my behalf. As my turn was nearing and my confusion at the question was increasing. It suddenly occurred to me that there is something missing here and being from an Egyptian origin myself I though to myself, hang on, the ancient Egyptian have been trading all over the globe for seven thousands years, the mummies of the pharaohs still preserved today are all encased in Tobacco leaves that could only have been "cheaply" sourced from the Americas thousands of years ago.

The roman empire invaded and occupied Egypt for only one thing, cheap and high quality Wheat to feed its army so that they could march further, occupying other territories and obtaining more goods and services from other cheaper sources.

The British Empire was built on trade and the desire to obtain goods, services and labour cheaply from all over the world. The British Empire gone even further and outsourced armies using other countries in Asia and Africa to fight the British wars up until to the Second World War. Cheap silk and spices from India, Cotton from Egypt and Tobacco from America and so on.

Most wars in history were about obtaining goods and services from cheap sources in reality.

This is why I didn't understand the question in the first place.

At this stage I collected my courage and let it all out to my colleagues and the moderator, they all enjoyed the remarks and laughed at it.

I don't think my remarks were funny at all. Sarcastic, may be but not funny.

Cheap sourcing is not a new game in town for procurement departments to brag about, it is in fact the oldest game in town since all empires in history were built and motivated by finding new cheaper source for labour, goods and services to please their citizens.

Put another way, all wars and empires were build and motivated by controlling these "cheaper" sources in the first place for the advancement of their own nations. These days the only difference is the fact that the acquirers of these goods and services have to pay the price which is usually still cheaper than obtaining it in their own country.

Osama El-Kadi - Negotiation Expert and CPO Centrica Plc

Osama El-Kadi is a negotiation expert and up to end of 2006 the chief procurement officer at Centrica Plc

Related Tags: negotiation, outsourcing, purchasing, cheap sourcing

Osama El-Kadi is chief procurement officer at Centrica Plc

Born 1955 in Manchester England, Osama graduated in 1978 with a BSC in Economics followed by an MA in International Business from Alexandria University.

Osama El-Kadi's career spans 28 years within UK based blue chip corporate companies. Starting from a Computer Analyst Programmer at NCR, to Chief Architect for worldwide banking systems, to Sales Director for CAI Europe, to General Manager Technology at the House of Fraser Group (including Harrods), to managing group procurement functions for the Automobile Association (the AA) through to his most recent position as Chief Procurement Officer in the Centrica Plc group of companies.

Over the years Osama has developed and negotiated successfully;

Major initiatives for strategic IT cost savings,
Multi million pound acquisition contracts,
Joint ventures and partnership deals
Lead the negotiations for the largest IT infrastructure outsourcing programme in Europe in

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