What are Strategic Sourcing Strategies and How Can They Optimize Your Supply Chain
Cost reduction practices are usually centered on the optimization of your supply chain and the need to receive a better deal from your suppliers. The real cost reductions come when you are able to optimize the design phase of production. The design and production are the most expensive processes and if you can come up with ways to cut costs then you have found the key to saving money.
How Strategic Sourcing Comes to the Rescue
This is where strategic sourcing strategies come into play. Strategic sourcing strategies help you save money straight from your supply chain. It is an institutional procurement process that is always working to improve and re-evaluate the purchasing of products for your company. This means that there is a constant search for new sources for your products to make sure that your needs are always met. There are FOUR basic steps to strategic sourcing strategies:
These steps are part of a cycle, and each phase is constantly being performed to ensure ultimate cost savings. When strategic sourcing is in place it delivers savings immediately because the supplies are usually cut down to exactly what is needed and nothing extra. Strategic sourcing is flexible enough to meet the demands of the market because of its repetitive evaluation that is constantly going.
Important Factors of Strategic Sourcing
Surveying is by far the most important step in strategic sourcing strategies. This is where the amount of your savings are incurred and determined. There are many things that should be taken into consideration when you start your search for a list of suppliers. Finding out who sells what, and checking them against your needs is the first step. Once you have done this, you need to find out who is willing to negotiate the best deal.
Strategic Sourcing and Optimization
Another great way to reduce costs in your company is through the strategic sourcing of optimization. When reviewing your expenditures you should use your strategic sourcing to optimize your savings on your supply chain level. Getting the right suppliers for the right jobs is one way to make this happen. Constantly reviewing your suppliers to ensure that they are giving you the best deal is a part of all strategic sourcing strategies, so that as things change your company will know it first hand. Once a supplier quotes you a price for a shipment that does not mean it will be the same price the next time; this is why you constantly review the prices of your suppliers.
Strategic Sourcing is Smart Sourcing
Making smart business choices is the name of the game, and leveraging strategic sourcing strategies can help you make those decisions based on real time information and facts of all of your supplier options. Knowing your suppliers and what they have to offer is what strategic sourcing is all about.