Explore strategic sourcing by finding new suppliers for your critical materials.
Building collaboration and partnership. Identification of optimal cost saving opportunities.
Strategic Sourcing is the process of developing channels of supply at the lowest total cost, not just the lowest purchase price. It expands upon traditional purchasing activities to embrace all activities within the procurement cycle, from specification to receipt and payment of goods and services.
In most cases, following steps can be followed.
- Assessment of a company’s current spending (what is bought, where, at what prices?).
- Assessment of the supply market (who offers what?).
- Total cost analyses (how much does it cost to provide those goods or services?).
- Identification of suitable suppliers.
- Development of a sourcing strategy (where to purchase, considering demand and supply situations, while minimizing risk and costs).
- Negotiation with suppliers (products, service levels, prices, geographical coverage, Payment Terms, etc.).
- Implementation and continuous improvement
Outsourcing business practice to another company may also be incorporated into a sourcing strategy for services.
The sourcing plan is the result of all planning efforts on strategic sourcing. Into this planning all sourcing events are organized and detailed with all tactical and operational information such as, the sourcing team responsible for each event, when is supposed to begin and end each step, the requirement, specifications of all services or materials and negotiations/cost goals. The objective of the sourcing plan is to manage time and quality of all sourcing events in the strategic sourcing program.