What is Strategic Sourcing?
I’ve had a number of discussions recently on strategic sourcing. However defined, I call it simply finding the best suppliers and leveraging their performance throughout your extended organization. An integrated and high performing supply base improves operations, cash flow and customer satisfaction.
Strategic sourcing is a simple concept that we can get hung-up on. Companies don’t ‘install’ strategic sourcing, no matter what the e-commerce folks tell us. They improve on their sourcing. The opposite of strategic sourcing is not non-strategic sourcing. It is inefficient sourcing.
Companies do not find the wrong suppliers on purpose. It is a never ending quest to find, and perhaps develop, the best suppliers out there. You know, the ones that do their best to manage cost, quality, and fulfillment. I look at strategic sourcing as a continuum. Some companies do it better than others and there is always room to improve sourcing efficiency. Always.
How do you define strategic sourcing? Use the COMMENTS button on this page to share your thoughts.
Charles commented:
Richard's definitions make sense. The definition that you proposed
above is a helpful one - the strategic and non strategic contrast
is a helpful one. The author of this article also agrees with this
distinction: www.epiqtech.com/strategic-sourcing-overview.htm
BHARATH GIRIYAPURA commented:
I am in agrement with Richard. Strategic sourcing is all about
finding, negotiating & contracting with the best supplier who
can fulfil the organisation's needs, such supplier whose
capabilities could be leveraged in the longterm for the benefit of
the organisation. Thus it is also important for the sourcing
professional to have clear visibility of his/her organisation's
long term goal & business plans to derive an effective sourcing
plan.
