Strategic Sourcing in the Mid-Market
A Creative Approach to Strategic Sourcing and Supplier Engagement

Purchasing managers and strategic sourcing professionals often follow a consistent methodology when planning and conducting a sourcing initiative. Having a process provides a framework that, when correctly applied, can produce sustainable savings in a consistent manner. Creativity in the application of the strategic sourcing process will have a dramatic effect on the results achieved, regardless of whether a seven step sourcing process or a customized internal sourcing process is used.

Going Beyond the Seven Step Sourcing Process

Most mid-sized eterprises lack disciplined sourcing practies, category expertise, and spending power to neegotiate and maintain competitve supply chains, according to a new Aberdeen Group benchmark report; Strategic Sourcing in the Mid-Market Benchmark: The Echo Boom in Supply Management. Aberdeen estimates that such deficiencies are costing mid-size firms in the U.S. $134 billion a year in missed supply savings opportunities.

In order to best optimize the results of a strategic sourcing initiative, there are several questions that should be answered at the project’s initiation:

  • How can we improve our understanding of the sourcing process?
  • What are the X-factors that arise when executing a sourcing project?
  • What other considerations should the sourcing professional account for while administering the strategy?

  • Two frequently overlooked components of any strategic sourcing methodology involve the collection of innovative market information and the supplier approach strategy. Often during the course of a strategic sourcing initiative, new product developments, alternate technologies, and shifts in spend patterns present themselves. A Creative Sourcing™ process is dynamic, so the sourcing professional may need to implement a revised or new strategy to adapt to changing conditions and events.

    The sourcing professional should consider how and when to approach both incumbent and alternate suppliers during the actual sourcing phase. Imaginative strategies and open communication will help motivate suppliers to present the best proposal and optimize the total project results.

    Project Team and the Internal Benchmark

    The benchmark will set the foundation upon which the sourcing initiative will be built and measured. Before the benchmark can be established, the project team must be assembled. The project executive or sponsor should identify the best resources both internally and externally to work on the initiative. The project sponsor must ask the following questions to begin to develop the team:

  • Who within the core sourcing group is best equipped to work on this initiative?
  • Who can be enlisted from other departments within the company to participate in the cross-functional team?
  • Should additional resources be recruited from outside the company? (either consultants or business partners)
  • What is the cost of applying these resources?
  • Determining the best, most cost effective resources will help to ensure that the ensuing process is a focused, collaborative effort that yields tangible results......

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