Why strategic sourcing is important in procurement

Posted by tedmark on January 27th, 2013

Having a business calls for a whole range of responsibilities that the owner needs to take care of, to make sure that your company is running well. Several strategies have to be devised and implemented in order to make sure that a smooth flow is maintained. Strategic sourcing is one of them which is the process of ensuring that the purchases made by the company are thoroughly assessed all throughout. An integral part of the supply management, every company requires to have their chain of supply maintained all throughout so that the cost is kept minimum while the supply line stays perennial. Usually in a procurement leaders conference, the necessity of strategizing procurement is stressed upon, but sourcing is also equally important.

The reason why strategic sourcing is now considered crucial for business operations is because it ensures that the cost is minimum, the technology used is premium, quality of the raw materials or input is of standard, etc. The process of cost cutting is never possible if you are just going on for it singlehanded or squeezing any single area of investment. If you attend a procurement leaders conference, you will get to learn that it takes collaborative efforts and its implementation in different areas to bring down the gross amount.

If your company’s strategic sourcing is correct, it can actually leverage the buying capacity of the company. However, there is a significant difference between strategic and customary sourcing. Through the strategic planning, you can maintain a symbiotic business relationship with the supplier. The cost saving benefits of this process is multi-faceted. You can expect to cut the investment and expenditures of your company in different departments which finally enables you to have a happy and longstanding relationship with your suppliers while getting the purchases done at the bare minimum cost. During the procurement leaders conference, the managers say that it all starts form the assessment of the spend chart of the company.

It takes an analyst to inspect the supply market thoroughly, focusing on the particular source from which the products are supplied to kick start strategic sourcing. Next, you need to look into the price figures charged by the seller and analyze whether it is justifiable. If they find that the seller is charging the company more than is absolutely necessary, then they turn to look for another vendor without intimating the existing one. What is thought indispensible in every procurement leaders conference is that a line of supply should not be terminated before another stable, dependable and long-term seller is contacted with.

If you are to look for new suppliers, negotiation is crucial in order to make the best out of the deal. Sketch out an entirely new and improved supply structure to ensure that the graph moves higher and betterments are visible following the same. The process of strategic source is cyclical and requires certain predefined steps and methods to accomplish it.

Planning to make a successful strategic sourcing for your company. Come, attend our procurement leaders conference which will be held on 27th of this month to know everything about procurement and sourcing strategies.

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