Shared Services and Supply base erosion

[Supply-Base]

I have a question: Many people, as recently reported in local newspapers, associate erosion of supply base with shared services initiatives. surely, the consolidation of acquisitions and channeling them to a couple of 'Strategic Suppliers" can be detrimental to the health of your supply base and cost in the long run, but does it really have anything to do with shared services?

Any comments or thoughts are appreciated.

[Akrouche-A]

I think the 2 are connected, but not necessarily dependent. Shared services is understood by most people as a consolidation project that aggregates service requirements and provides a unfiorm or common service to all participants presumably at a lower cost. It is the backend of this equation that can cause erosion of supply base ( particulary among the SME) if not handled properly. The now big but common organization, consolidates its acquisition practices and channels them through the bigger suppliers. This, without proper protection or nurishment can create an environment where the SME are shut out and competition even amongthe bigger players is minimized.

[Akrouche-A]

I am doing more research in this area and will be back to the board with some conclusions.