What is strategic sourcing framework?

Posted on by Muna Meyer

What is strategic sourcing framework?

Strategic sourcing is an approach to supply chain management that formalizes the way information is gathered and used so an organization can use its consolidated purchasing power to find the best possible values in the marketplace and align its purchasing strategy to business goals.

What are the types of sourcing strategies?

Some sourcing strategies to consider:

  • Outsourcing. Having suppliers provide goods and services that were previously provided internally.
  • Insourcing. Delegating a job to someone within the company.
  • Nearsourcing.
  • Vertical integration.
  • Few or many suppliers.
  • Joint ventures.
  • Virtual enterprise.

What is the first step in the framework of strategic sourcing?

What is Strategic Sourcing?

  1. Step 1: Profile The Category.
  2. Step 2: Supply Market Analysis.
  3. Step 3: Develop The Sourcing Strategy.
  4. Step 4: Select The Sourcing Process.
  5. Step 5: Negotiate and Select Suppliers.
  6. Step 6: Implementation and Integration.
  7. Step 7: Benchmarking.

What is the difference between sourcing and strategic sourcing?

The general difference between strategic sourcing versus traditional sourcing is that sourcing focuses on supplier pricing whereas strategic sourcing has evolved into a more dynamic process with cost being only one component of a hierarchy of corporate needs, such as assurance of supply, service, quality, innovation.

How do you develop a sourcing strategy?

FIVE STEPS FOR BUILDING A GLOBAL SOURCING PROCESS

  1. 1 | BUILD A TEAM. More and more companies are taking the team approach to making sourcing decisions.
  2. 2 | CONDUCT MARKET RESEARCH ON SUPPLIERS.
  3. 3 | STRATEGIC DEVELOPMENT.
  4. 4 | COMPETITIVE BIDDING PROCESS, NEGOTIATION AND CONTRACTS.

What is the main focus of strategic sourcing?

Strategic sourcing is a procurement process that connects data collection, spend analysis, market research, negotiation, and contracting. It stops short of the actual purchase of and payment for goods and services.

What are the 6 R’s of purchasing?

Right Place.

  • Right Quality:
  • Right Quantity:
  • Right Time:
  • Right Source:
  • Right Price:
  • Right Place:

What is the difference between purchasing and strategic sourcing?

Purchasing Vs Strategic Sourcing: Key Areas of Difference. Supply chains are everywhere. Cost – This is a vital factor as often purchasing includes only at the price value (lowest possible cost per unit). However, strategic sourcing envisions the total cost of doing business with a supplier.

What are the seven steps of strategic sourcing?

X Ray Phase|Fully understand the spend category.

  • Supply Market Analysis. The main activity on this phase requires identifying potential new local and global suppliers; we shall understand their own marketplace trends and dynamics in
  • Develop the Sourcing Strategy.
  • Start Sourcing Process.
  • Negotiation and Selection.
  • Communicate&Implement.

    • What are the steps in the strategic sourcing process?

    Profile the Category. The first step of strategic sourcing is identifying your business’s sourcing category or commodity.

  • Understand the Supply Market. The next step is a market analysis to determine potential new local and global vendors or suppliers.
  • Grow a Sourcing Strategy.
  • Choose a Satisfactory Sourcing Process.

    • What is strategic sourcing and why is it important?

    Higher Degree of Cost Savings. The most obvious advantage that organizations get from strategic sourcing is that cost savings are improved.

  • Lowers the Risk Involved. Strategic sourcing lowers risk in the supply chain beyond the compliance checks.
  • Business and Sourcing Objectives are Better Aligned.
  • Ideal Suppliers are Optimized.

    • What are the levers of strategic sourcing?

    Strategic sourcing is a lever companies should focus on to reduce cost, sustain operations and thrive as a successful business in the future. Such shocks have been observed across multiple industries with extremely different supply chains. Indeed, healthcare, pharmaceuticals and some food & beverage companies have seen