Strategic sourcing can be the bedrock for deep change within a supply chain that leads to better financial gains. With all of the necessary tasks facing an organization, improving procurement and sourcing practices is the effective way to work toward better business. There are more specific means to measure the importance of strategic sourcing, though.
These are three of the most persuasive reasons to work with expert sourcing resources that can counter expenditures while still being productive.
1. Better guidelines for future improvements
Strategic methods allow businesses to gather data and make informed choices with a better idea of the outcome. This can mean reassessing current contracts. Federal News Radio wrote about the Department of Homeland Security's efforts, as told by the Office of the Chief Procurement Officer's Strategic Sourcing Program Office director, Jaclyn Smith.
According to this article, Smith explained the significance of the department's interest in strategic procedures at a panel earlier this year.
"We are talking policy impacts," Smith said. "We are talking about how you are fulfilling now and shifting from 'OK, this contract is up for recompete, and just because it's up for recompete, it doesn't mean we need to recompete it in the same manner that we did before.' "
"The need for a good business relationship can be all the more noticeable."
When businesses need to work with an extensive list of enterprises, the need for a good relationship between them can be all the more noticeable. Strategic sourcing is once again a key way to respond to this complexity.
Supply Chain Quarterly spoke to the lead author behind a research study about the different types of "power" that buyers and sellers have. This author, Felix Reimann, summarized the findings by saying that supply chain executives should be "fully aware" of supplier interactions. He suggested multiple ways this can influence performance, from assuring suppliers that efforts are more coordinated to providing a platform for incentivizing this coordination.
This speaks to the more indirect effects that using strong sourcing and procurement practices might have. Even if your organization has to change suppliers or renegotiate, having enough recorded data can help you make this decision, as well as others. In fact, using the right processes can provide some concrete information about who the suppliers are and perhaps even what their practices might be in the first place.
3. More justification for change
Once again, the data discovered in strategic sourcing can be the beginning of meaningful changes. Rather than just an improvement, this could reflect a realignment or some other overhaul that indicates a bigger switch for the company itself.
It all comes from knowing which points will mean the lowest costs and are going to be most effective in the long term. The changes you choose may also fall in line with other important imperatives, such as better use of ethical or green sourcing. In addition, these methods could also allow you to verify that new changes really are as productive as you'd like them to be and having the desired effect.