Purchasing organization design


A global telecoms operator faced the question of how to organize its procurement and logistics activities. The company had grown through acquisition of more than 20 national mobile phone networks and wished to gain economies of scale while remaining closely attuned to differences in local markets. We were asked to identify and assess organizational options, leading to a Board-level recommendation.


First, requirements were developed for two distinct purchasing groups: One for the network infrastructure and a second for the handsets. Parallel approaches were taken for the two categories. The supply base (global and national) was defined for each, key aspects of national-level demand were profiled and the mechanisms for local responsiveness and global efficiencies were explored. Options were then identified, ranging from fully centralized to totally decentralized and including several hybrid structures. These were evaluated by the project team against a set of agreed criteria. Specific roles and responsibilities were then detailed, for the recommended organizational designs.


Organizational designs were agreed across the global organization, facilitating scale economies while remaining tuned to individual national markets as well. The solutions were different for the two sourcing groups.