Recently I had an interesting discussion with Head of supply chain shared service center (incidentally was also an old acquaintance) of a global organization. While we had difference in thoughts towards captive model approach, I picked something very interesting from him on the approach towards supply chain shared service center. His view was - simplistically, most organizations take a holistic view on shared services around three fundamental parameters:
1. Optimal structuring by resizing the staff and align them to the changing business needs with improvised skills and knowledge. This provides a recurring savings depending on the maturity and efficiency of the current processes.
2. Optimal location by sourcing the staff from the right place or country which provide the right skills or talent at a lower price - basically labor arbitrage. This also provides a recurring savings depending on the cost of living. Of course other points of considerations are business friendliness, quality of life, infrastructure quality, and currency fluctuations.
3. Optimal tasking by introducing the right tools, process improvement, service metrics and governance. Over a period of time this provides sustainable savings with relatively less change management issues.
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