Cross-departmental collaboration in strategic sourcing as a catalyst for supplier development: The case of Eskom

Objective: The objective was to analyse the integration of and collaboration between strategic sourcing and supplier development at Eskom, South Africa’s primary electricity supplier, and to determine how strategic sourcing can be a catalyst for supplier development. Problem investigated: To address fragmented and inefficient procurement, Eskom instituted two departments, Commodity Sourcing (CS), to drive strategic sourcing, and Supplier Development and Localisation (SD&L), to drive supplier development. The problem is that collaboration between CS and SD&L has not materialised and thus their mandates have not been entirely achieved. Research design: A case study research design was employed, drawing from multiple sources of data to triangulate findings. Managers from two departments, CS and SD&L, were separately surveyed, while face-to-face interviews were conducted with executive management. Results: The findings revealed a lack of planning, implementation and monitoring of supplier development in the strategic sourcing process of CS. Although the procurement spend in CS is used to drive supplier development objectives, from the perspective of SD&L, in practice this does not fully materialise. Originality and/or value of the research: The study is unique as it focuses on cross-departmental collaboration within the organisation, rather than collaboration across the supply chain with external partners. From insights into the dysfunctional relationship between the departments, solutions for increased collaboration and effective supplier development could be suggested. Conclusion: For strategic sourcing to be a catalyst of supplier development, it is essential that an integrated strategic sourcing operating model incorporating the objectives of both CS and SD&L be developed.