Strategic sourcing
From Wikipedia, the free encyclopedia
Strategic sourcing is a systematic corporate/institutional procurement process that continuously improves and re-evaluates the purchasing activities of a company. It is one component of supply chain management.
While most organizations implement strategic sourcing initiatives for the purposes of saving money, other reasons for implementing strategic sourcing include improving supplier performance and minimizing risk.
The steps in a strategic sourcing process are:
- Assessment of a company's current spend (what is bought where?)
- Assessment of the supply market (who offers what)?
- Development of a sourcing strategy (where to buy what, while minimizing risk and costs)
- Identification of suitable suppliers
- Negotiation with suppliers (products, prices)
- Implementation of new supply structure
- Track results and restart assessment (continuous cycle)
Systematic strategic sourcing was initiated by General Motors in the 1980s and soon became a common strategic business tool. Many companies worldwide reviewed their purchasing activities and initiated strategic sourcing programs in response to the rise of the People's Republic of China as a global manufacturing hub after its accession to the World Trade Organization in 2001.
[edit] See also
- Reverse auction
- RFP
- Supplier Relationship Management
- Procurement
[edit] References
- Nishiguchi, Toshihiro. Strategic Industrial Sourcing (New York: Oxford University, 1994) ISBN 0-19-507109-3
[edit] External links
- Procure IQ - News and commentary on strategic sourcing and supply chain management.
- Purchasing magazine
- European Leaders in Procurement magazine
- Whitepapers on Procurement services
- Strategic Sourcing
