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Tenets of Strategic Sourcing

  • Executive stakeholder
  • Purchasing goals linked to corporate goals
  • Supply assurance – risk awareness, supply chain mapping, and resilience
  • Corporate social responsibility
  • Coalition building, internally and externally
  • High percentage of spend managed by procurement
  • Ongoing market intelligence
    • Knowledge of the available supply base
    • Knowledge of current costs and cost drivers
    • Knowledge of new materials, processes, and technologies
  • Knowledge of organization’s spend (spend analysis)
  • Segmenting spend
  • Managing relative power
  • Robust, rigorous (but adaptive) supplier selection process
  • Manage and/or reduce demand
  • Standardize parts
  • “Center-led” organizational structure
  • Organized around families of goods/services with like characteristics (“category management”)
  • Cross-functional sourcing teams
  • Optimized supply base
  • Reduced total costs of ownership
  • Leveraged/consolidated spend
  • Strategic management of key suppliers
  • Integrating supplier innovation
  • Supplier development
  • Early supplier involvement
  • Automated processes and predictive analytics