Aberdeen Group report showed that 68% of the companies analyzed say that strategic sourcing is crucial for business. Of these, 53% indicate that the alignment of activities and sourcing objectives with the company’s objectives is part of the company’s business strategy.
This information shows the relevance of the work performed by strategic outsourcing today, even more because of the pressure that the purchasing area faces to further reduce the costs and resources used.
Despite this, strategic sourcing is seen by many professionals as a purchasing initiative that seeks only to find the lowest price on the market. This misunderstanding needs to be avoided, as strategic sourcing is a process in which the company allows the purchasing sector to take the lead in meeting business needs and, yes, it also finds ways to reduce costs, while adding business value.
Analyzing company spending
Strategic sourcing analyzes all the company’s expenses (Spend Analysis), the market and the demands. With this information, strategies are defined for each category of product or service, with a focus on Total Cost of Ownership (TCO), not just price.
For this, it is necessary that the purchasing sector has the appropriate tools for the analysis of costs, requisitions, procedures and to correctly manage the relationship with suppliers. They are tools that allow you to choose what is being purchased, the price paid, who is buying from, what is the volume and how the purchase is made. The more automated these processes are, the more efficient the purchasing sector will be.
One of the benefits of investing in strategic sourcing is in increasing profitability. Each real saved directly and positively affects the company’s final result. In addition, the possibility of building strategic partnerships with suppliers is another important aspect, since many of them have resources not available to the company.
Purchasing intelligence
Another benefit of strategic sourcing is that it facilitates the management of supply risks, as the supplier is assessed for availability, quality, financial risks and its level of cooperation.
One way to optimize strategic sourcing is to invest in category management, which can be defined as an approach that organizes purchasing resources so that the sector can focus on specific areas of spending categories. Thus, managers can focus their attention on business requirements, in more in-depth market analysis and on the performance and capacity of each supplier.
In addition to looking for faster ways to reduce costs, a strategic approach allows adding value to this cost, in addition to reducing operating expenses and allowing an increase in productivity. The purchasing sector needs to have greater autonomy to understand the real needs of the company and ensure that purchases are made intelligently.
Strategic sourcing is successful when partnerships with suppliers become stronger and longer lasting, with a more transparent relationship in which companies join forces so that they can grow and develop side by side.
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