Benefits of Strategic Sourcing

Rather than carrying out a fulfillment or reactionary approach to procuring what an establishment needs, strategic sourcing takes a more information-guided, proactive approach to procurement. Strategic sourcing also helps procurement professionals fulfill their dual roles of cost and supply management. Strategic sourcing helps companies in the processed meat products market to achieve efficiency by formalizing the way spend information is gathered, analyzed, and articulated into the procurement process. Strategic sourcing is an ongoing process that considers factors far beyond just cost of a product or service. Furthermore, a robust strategic sourcing approach allows procurement professionals and category managers to integrate purchasing power to secure the best value available in the marketplace.

Challenges Faced by Processed Meat Products Manufactures

Intensifying costs of raw materials: The global processed meat products industry is continuously battling ebbs and tides which makes it difficult to predict market volatility and prices of the raw materials. As a result, processed meat products manufacturers must find a way to deal with increased costs on a short- or potentially long-term basis so that they can increase their overall production.

New regulations and higher expectations: Over the years, the processed meat products industry has made tremendous strides in both controlling and reducing pathogenic organisms. However, manufacturers need to look at the next level of goals and targets being established by the Food Safety and Inspection Service. This is expected to challenge manufacturers as it requires new methods and approaches to meet the expectations.

What the Client Wanted

The client- a US-based multinational manufacturer of high-quality food and processed meat products, had operated as distinct and separate business units over its history. However, the company had grown to a point that significant supply chain opportunities and benefits of strategic sourcing were going uncaptured and enterprise capacities were not being leveraged efficiently.  Moreover, the company did not have the resources, processes, systems, and proficiency to take optimal advantage of these opportunities.

The Outcome

The processed meat products company implemented a sophisticated strategic sourcing process supported by the web-based e-sourcing platform. This helped them full leverage enterprise-wide volumes and achieve cost savings in excess of US$ 125 million.

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