Strategic Sourcing is the method to identify the investment options and negotiations for an organisation and its resourcing suppliers to confirm a beneficial business with the supplier. Globalisation has brought the worldwide markets on collaborative and associated platforms. There is lot of competition and chase between suppliers for gaining maximum access to fulfill the requirements of sources needed to run a business. All the concept and process of procurement is achieving new standards as per the requirements of global markets. It is very important for the organisations to assign special strategies to accomplish sourcing goals. This systematic, innovative and well researched management of logistic requirements of the company is called strategic sourcing. It emphasizes on availing lowest total cost of ownership(TCO) and minimal risk factors in supply chain management.
Strategic sourcing is done by evaluating all the quality suppliers in the market in terms of valuable services or goods at minimum possible prices. The refined interpretation of the standards of sources and the rates offered by the respective suppliers give clear insight to take intelligent decisions in selecting the most suited supplier for the company. It upgrades the total revenue of the company by minimizing the cost spent on procurement of sources and by erasing any chances of errors in services or products offered by the company.
It recognizes the suppliers as valued partners in upliftment of business image and capital benefits. The intermediate gap between customer and supplier is analyzed to facilitate customized strategies to fulfill the needs of the organization. The goals to reach a successful business are accomplished by developing innovative strategic sourcing techniques like spend analysis, evaluation of supplier, relationship management with supplier and well researched market reporting. Highly expertise professionals, investigators and researchers enabled with smart technology are required to implement strategic sourcing into an organisation.
Strategic sourcing focuses on building trust on single point suppliers rather than scrolling between multiple suppliers. It encourages to reach out to the best possibilities of upgrading the sourcing quality within the scope of existing suppliers rather than wasting time on finding out new suppliers. This trust and faith oriented relationship with the sustained suppliers motivates the suppliers to retain in a confident association with the organisation. They work more on upgrading the values of their services or goods to maintain a long term relationship which is beneficial for both the parties.
It involves research amongst supplier market, acceptance of quotations from the most appropriate suppliers and selecting the compatible one in terms of better quality and low costing.