Strategic sourcing
From Biocrawler, the free encyclopedia.
Strategic sourcing is a systematic procurement process that continuously improves and re-evaluates the purchasing activities of a company. It is a form of supply chain management.
The steps in a strategic sourcing process are:
- Assessment of a company's current spend (what is bought where?)
- Assessment of the supply market (who offers what)?
- Development of a sourcing strategy (where to buy what, while minimizing risk and costs)
- Identification of suitable suppliers
- Negotiation with suppliers (products, prices)
- Implementation of new supply structure
- Track results and restart assessment (continuous cycle)
Systematic strategic sourcing was initiated by General Motors in the 1980s and soon became a common strategic business tool. Many companies worldwide reviewed their purchasing activities and initiated strategic sourcing programs in response to the rise of the Republic of China as a global manufacturing hub after its accession to the World Trade Organization in 2001.
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References
- Nishiguchi, Toshihiro. Strategic Industrial Sourcing (New York: Oxford University, 1994) ISBN 0195071093
