What is the process of Strategic Sourcing?

Editorial Team

the process of Strategic Sourcing

Unlike traditional purchasing methods, strategic sourcing aims to use a comprehensive system that can be customized to meet individual customer needs, ultimately leading to higher profits. This involves evaluating the overall cost of obtaining a product, including acquisition, usage and disposal expenses, and developing strategic partnerships with suppliers. Indeed, building strong relationships with suppliers and forming strategic alliances are key skills that can be enhanced through procurement training. The goal of these principles is to foster collaborative relationships that will result in mutual benefits and encourage innovations in products.

Strategic sourcing constantly involves researching and analyzing the market to achieve cost savings by maximizing the sourcing process. This approach promotes ongoing enhancements as the purchasing method is regularly reviewed and adjusted to ensure top-quality results. Of course, the goal of strategic sourcing is to align with business objectives and contribute to overall company performance, including reducing expenses.

How can Procurement Training enhance Skills in Strategic Sourcing?

Procurement training is crucial in providing employees and managers with the necessary skills, knowledge, and techniques for strategic sourcing. This includes understanding and managing complex briefs and specifications, as well as running RFIs (Requests for Information) and RFPs (Requests for Proposals). The training also focuses on market analysis, supplier selection and project management to improve efficiency. By mastering these components, trainees are better equipped to handle any challenge with confidence and ultimately save costs for the company. Here are two examples of training modules that effectively enhance skills directly related to strategic sourcing.

e-sourcing & Procurement

e-sourcing has become the norm in strategic sourcing. It increases efficiency, reduces costs and helps with supplier integration. Training in e-sourcing includes learning about the creation of e-RFIs and e-RFP, how to validate offers and all there is to know about e-Auctions (strategy, evaluation and results).



Local vs. Global sourcing

Since the concept of strategic sourcing involves conducting a comprehensive market search to secure the most favorable pricing and reliable suppliers, this often requires procurement agents to consider both local and global sourcing options. In this training module, participants learn about the benefits and drawbacks of each approach and how to minimize potential risks in order to establish a stronger, more resilient supply chain.

Conclusion

Numerous case studies have proven the effectiveness of strategic sourcing initiatives in achieving cost savings. In fact, various training courses offer detailed explanations and examples. However, this article has already detailed why the guiding principles and methodologies of strategic sourcing ultimately lead to numerous benefits beyond cost savings. Therefore, it is crucial for companies to continually invest in procurement training to equip their employees and managers with the necessary knowledge for successful strategic sourcing practices.