SPEND ANALYSIS & SOURCING
Strategic sourcing : Leveraging spend analysis insights Strategic sourcing is the process of developing channels of supply at the lowest total cost – as opposed to just the lowest purchase price .
It goes beyond traditional procurement by taking a holistic view of the organisation ’ s needs and aligning them with market opportunities .
The strategic sourcing process can be outlined as follows :
• Spend analysis : Understanding current spending patterns and identifying opportunities .
• Market analysis : Researching supplier markets and industry trends .
• Supplier evaluation : Assessing potential suppliers based on various criteria .
• Negotiation : Engaging with suppliers to secure optimal terms .
• Implementation : Executing the sourcing strategy and managing supplier relationships .
• Continuous improvement : Regularly reviewing and refining the sourcing strategy .
Speaking to Procurement Magazine last year , Gregor Stühler , Co-Founder and CEO at Scoutbee , explained how strategic sourcing can empower procurement executives to take control in times of uncertainty .
“ I think , if we ’ ve learned anything over the last couple of years , it ’ s that nothing is certain , except perhaps , more uncertainty ,” he said . “ Strategic sourcing can help build stable supply partnerships to keep organisations ’ operations running smoothly in tumultuous times .
“ It can also help when it comes to risk management , as closer supplier relationships help companies identify and resolve potential problems quickly , before they become major issues . This also involves seeking out alternative sources in case natural disasters , geopolitical events or other crises cause disruptions in the supply chain .”
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