Strategic Sourcing Plan: The 7 Key Steps

Strategic Sourcing Plan

THE 7 KEY STEPS

Introduction The process of strategic sourcing starts with a properly developed sourcing plan that can be properly implemented by the procurement subcontractors to strategically finetune the supply chain for maximized cost reductions, streamlining of business processes, and create value that exceeds business requirements.

Needs Analysis

roadblocks etc. as well as the vendors on the grounds of compliance, performance data, redundancies etc. You also need to identify the improvement goals.

With the help of the relevant software tools procurement consultants will smooth out this process, as they will have access to the current and historical performance, cost data, compliance, and analysis tools.

Who am I?

This phase would require bench-marking the current processes of procurement on the grounds of cost-effectiveness, efficiency, pain points,

Supply Market Analysis T h i s p h a se i d e n ti fi e s m a rke ts th a t w o u l d p ro vi d e co n si sten t, rel i a b l e, a n d h i g h - g ra d e ra w m a te ri a l s , fi n i sh e d g o o d s , co m p o n en ts , a n d serv i ces. T h ese m a rke ts a re ra n ke d b a se d u p o n s u i ta b i l i ty , co s t a n a l y s i s, extern a l fa cto rs, a n d s p en d ca te g o ri e s.

Supplier Review

Suitability of the suppliers will be based by the procurement subcontractors upon the financial stability, performance, creditworthiness, reputation, historical and current compliance with the government and industry standards, references.

This weeding helps to identify opportunities, eliminate redundancies, and rehabilitate the under-performing vendors within the existing supply chain.

It also helps to simultaneously add contingency suppliers that help in preserving business continuity against potential disruptions.

While it is important to know which suppliers to buy from, it is also very important to have a strategic plan regarding how to buy the goods.

Based upon the overall business strategy of your organization, its goals regarding relationship management with the suppliers, further development, and strategy for risk management, procurement experts may help you revise the existing protocols as well as establish some new ones.

SOURC I N G S T R A TEGY DEVEL O P M E N T

Introduction of the concepts like paperless processes, guided buying, automation of the repetitive and highvolume tasks will involve the existing staff undergoing relevant training for adopting these newer and more efficient processes, while also adhering to the extant sourcing strategy. This

IMPL E M E NTATION

will help prevent rogue spend.

Engaging With Suppliers In this phase collaboration and communication are especially important, because vendors require to know the organization’s needs for both securing business and continuing the same upon signing of the contract. Ensuring smooth access and navigation to the vendor portal for everyone will help in promoting and preserving goodwill and continued relationships with the current as well as potential suppliers. This will also ensure that relevant vendor information is being captured in the centralized system for data management from the first day on.

the procurement experts may be compared and analyzed with respect to the set KPIs for both vendor management as well as internal procurement processes.

Data analysis will enable the team to review KPIs for determining areas that need further improvement. They will also help to recognize opportunities for adjusting the supply chain for improvement in terms of profitability, resiliency, and competitive agility.

Review, Refine, Revise

In this phase, the steady flow of data through the digital procurement solutions adopted by

Conclusion

Every company must stick to the above steps during formulation of its strategic sourcing plan. Its proper execution with the assistance of procurement consultants is what marketing executives look for.

Conclusion