Strategic sourcing is a process of selecting suppliers based on criteria beyond just price, which involves analyzing a company's spending patterns,
identifying opportunities for cost savings, and building long-term relationships with suppliers.
Benefits of Strategic Sourcing
Strategic sourcing can help companies reduce costs while achieving and maintaining quality, manage risks by diversifying their supplier base, and build strong relationships with suppliers through supplier engagement.
Supplier engagement is crucial to the success of strategic sourcing, as it involves involving suppliers in the sourcing process & treating them as partners, which can lead to better pricing & terms in the long run.
Technology in Strategic Sourcing
Technology plays a crucial role in helping businesses establish and adhere to a strategic sourcing plan, by providing a centralized
platform for managing supplier information, tracking supplier performance, and automating procurement processes.
Key Considerations in Strategic Sourcing
The key considerations in strategic sourcing include in-house benchmarking, spend analysis and opportunity assessment, market impact assessment, creation of RFX
documentation, and selection and negotiation with suppliers. These considerations can be supported by procurement technology that incorporates both spend analytics and eSourcing capabilities.