Value-Chain Report -- Leading Practices In Strategic Sourcing
In the quest to develop ever more efficient supply chains, many manufacturers, distributors, retailers, governmental agencies, and other entities are turning their attention to their supplier network. These firms recognize that, in many cases, a large percentage of their cost of sales resides in the cost of purchased materials and services. They also recognize that any savings that can be achieved through improved sourcing practices will likely result in almost a one-for-one improvement in profitability. Major improvements in sourcing effectiveness usually result from implementation of a robust strategic sourcing approach. Strategic sourcing is the systematic application of sourcing- and supplier-management techniques and methodologies that optimize the buyer-supplier relationship and minimize overall supply-chain-sourcing costs. Key Elements of Strategic Sourcing At a minimum, a robust strategic sourcing approach is likely to encompass at least five primary areas, including: