Strategic Sourcing Steps
Strategic sourcing can either make or break a business and helps businesses find the right suppliers. Here are a few general strategic sourcing steps that an organization must follow to reap the benefits of strategic sourcing.
- Identify Needs: Consolidate and coordinate in-house work orders and get familiarized with the needs of the company on a regular basis. Also, track purchase orders and product deliveries and understand the delays, shortages, and fluctuations of the products.
- Connect with the Suppliers: Build a team of suppliers who work well together. This will help an organization achieve windfall in several circumstances.
- Invite Bidding: Invite new suppliers to place bids or come in for consultations and interviews. Additionally, make sure that the prospective supplier understands the company needs and expectations. This becomes crucial for any business to achieve success.
- Grant Trial Contracts: Set up trial contracts, by limiting the obligations to a certain duration helps an organization observe the way that the potential supplier operates and weed out those who do not meet the desired preferences.
- Compare Track Records: Setting up a wish list for the potential suppliers helps an organization maintain accurate records; thereby, allowing a company to take necessary actions when a problem first surfaces.
Benefits of Strategic Sourcing
Strategic sourcing helps organizations join forces with suppliers and vendors who can help grow business while weeding out the suppliers and vendors who hampers the progress. Strategic sourcing is an ongoing process that considers factors beyond just cost of a product or service and helps procurement professionals fulfill their roles of cost and supply management. Moreover, a robust strategic sourcing approach allows category managers and procurement professionals to consolidate procurement power to secure the best value available.
In our latest engagement, we helped a leading healthy snack foods manufacturer administer multi-year supply agreements with incumbent suppliers defining services and pricing terms.
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About the Client
The client – is a multi-national privately-owned company based out of Canada. It is the world’s largest manufacturer of frozen potato products and healthy snack foods.
The client had no central capture of specifications or pricing for new items. Also, the company had no formal supply agreements in place. As a result, they wanted to leverage the strategic sourcing steps and reap the benefits of strategic sourcing. Additionally, the healthy snack foods manufacturer wanted to meet product specific protection requirements and build strong relationships with incumbent suppliers. Furthermore, the healthy snack foods manufacturer wanted to eliminate the unique barrier properties to maintain product freshness.
With the help of SpendEdge’s strategic sourcing engagement, the healthy snack foods manufacturer congregated and compiled specification and spend metrics across their business units. The client also performed a business needs analysis and leveraged total company spend volume with comprehensive sourcing effort. The strategic sourcing steps also provided additional criteria for client’s supplier evaluation program. Furthermore, the healthy snack foods manufacturer mitigated the economic risk in underlying commodity markets by pegging prices and reaped the benefits of strategic sourcing.
The Future of Food Trends
Today, it is hard to foresee the future of food in a world that is changing faster and faster. Ecological brittleness and the arrival of extremely disruptive technologies make this exercise increasingly arduous. However, by observing the evolution of dietary habits of the generations, it is possible to understand a few signs that express for themselves.
To know more about the benefits of strategic sourcing