There are a few ways you can actually gain a competitive edge for your business.
Strategic sourcing is among the most efficient ones. It will make a significant impact on your core organizational approach and become the true bedrock of your overall business growth.
A genuine strategic sourcing partner is an experienced negotiator and advisor, a mediator between business managers and key stakeholders in the company, providing a holistic view of its main activities. By working closely together, strategic sourcing will help both parties achieve their mutual corporate goals.
Strategic sourcing is continuously revolutionizing its processes. Its main focus is cost reduction and sustainable savings, but it also involves quality products and services, high-volume purchases, and minimized risks. Its continuous evaluation and re-evaluation, selection improvement and forecasting, as well as sustainable long-term partnerships with suppliers, are fundamental for maximizing the effectiveness of every company, regardless of its size.
By planning ahead and using a high-end strategic sourcing setup, your procurement and supply needs can be answered just in time, and in a surprisingly easy manner.
Having said that, what are the most obvious benefits of strategic sourcing?
1. Cost Management (Bottom line optimization)
Naturally, this is the most important benefit and the main reason why every high profile organization is leaning towards strategic sourcing. It’s simple – cost reduction impacts both buyers and suppliers. High-volume buyers can negotiate lower prices and increase profits. On the other hand, suppliers can sell their entire outputs faster and easier, therefore supporting long-term planning and cash flow. The same pattern can be implemented for procuring services.
2. Nurturing partnerships (+ Shared Risks)
Building a trusted network and sharing risk management are other fields where strategic sourcing can show its full potential. The closer and tighter you get with your suppliers, the easier both of you can overcome obstacles and avoid unpleasant surprises. We all know that good relationships are vital for success. They bring better quality, meeting cost and speed-to-market while allowing suppliers to be more efficient in responding to buyer demands.
2020 was the perfect example of how increased communication between partners can alleviate disruptions caused by global issues, such as the pandemic. While ensuring ongoing risk management across the entire customer-supplier loop, strategic sourcing makes that communication more efficient.
3. Finding opportunities/Learning from the market
Market analysis is a textbook component in developing a successful sourcing strategy. It can give you more visibility, accuracy, control, better forecasting, and contextual intel. By recognizing its challenges, you can spot fresh opportunities and achieve a competitive advantage.
4. Improvement and Innovation
Strategic sourcing is very dynamic. Its potential and profitability are just beginning to be recognized. Keeping up-to-date with its fast pace will make you become more proficient in your business field.
That includes using innovations that can facilitate the entire approach and provide a platform for collecting big data, which is one of many reasons why strategic plug and run systems are high in demand. They will help you become highly competitive, but they can also improve your corporate image.