There are numerous definitions of Strategic sourcing. Many of these definitions are unhelpful, using either academic or management consultants language to explain what is a straightforward but important, concept.
A business or organisation does what it does. It provides a service or it makes things to sell. The service it provides or the manufacture of the goods is its core business. It’s reason for being. During the course of it’s business, the organisation will have to pay for things including labor, premises, raw materials, services etc. and traditionally, the sourcing of these goods and services was done in response to the identification of an individual business needs.
Business needs could be local or global and as a result of a non-aligned procurement policy, the organisation may have found itself with many suppliers for the same category of goods or services and paying a wide range of prices. Without a strategic approach, no overall view of the sourcing costs and efficiency is taken and the profits of the business are effected.
Strategic sourcing is an approach to procurement whereby the business needs of the organisation are matched with the supplier market. It is much more than simply centralising procurement
Strategic sourcing is an approach to procurement whereby the business needs of the organisation are matched with the supplier market. It is much more than simply centralising procurement. The approach is founded on a detailed understanding of both the spend profile of the organisation as well as of the supplier market. This understanding is continually updated in order to deliver ongoing improvements to the organisation’s sourcing and procurement performance.
Most large organisations adopt a strategic approach to sourcing and its foundation is visibility of spend – the detailed and reliable view of what an organisation spends – but for many large organisations, spend data is imperfect and actual sourcing activity is often limited to a few categories of spend only.
A detailed definition of strategic sourcing can be found here
The world is analogue. This is why OCR won’t die. Together with technologies like RPA and AI, it helps to deal with the world as it really is not how we’d like it to be....
24 September, 2021 No comment
Even good, clean data reflects the uneven and imperfect world that we work in. It’s not good to have holes in your data but it not natural to have none. Uneven data can be difficult to read but perfectly straight lines only exist in theory. ...
20 September, 2021 No comment
There is no shortage claims for the application of AI but there always is when there’s a new buzzword that will sell strategy consulting. How much of it is real and how much is hype?...
28 May, 2021 No comment