Strategic Sourcing and Supply Management


Strategic Sourcing and Supply Management is about selecting the right suppliers and integrating them with the client’s business processes to improve their customer’s experience at the lowest total cost.  Many of today’s supply chains consist of a complex network of global suppliers.  Key operations are commonly outsourced to multiple suppliers.   Developing the proper sourcing strategies, enhancing supplier capabilities, and managing the supplier relationships can help a company reduce its cost of operations and create a competitive advantage.

Practical applications include:

Make vs. buy; strategic outsourcing
Supplier innovation and development
Leverage total company or partnership commodity spend
Diversity of supply networks
Building a strategic supply management organization
Global sourcing expansion
Strategic change in business model and supply strategy

Business Problem

Are you experiencing these business challenges?  Do these questions sound familiar?

Common Business Challenges

Failure to leverage volume and economies of scale and scope with fewer suppliers
Increasing cost pressure and competitive threats
Difficult to collect and analyze key data compounded by poor quality of data
Lack of automated, integrated process; failure to utilize technology solutions
Little internal collaboration with other business functions; procurement not included in the sourcing decision process until supplier negotiations
Strained relationships and lack of trust with suppliers
Lack of innovation and new-value creation from supply base
Sourcing mission and goals are not aligned to the strategic objectives of the company
Competitive outsourcing solutions vs. internal operations
Key Questions for Consideration

How does your supply strategy link to the company business strategy?
How are we driving innovation and new-value creation with our preferred outsourcing providers?  Are our  mutual interest 
                and incentives aligned?  Shared risks?
How do suppliers bring forward unsolicited proposals for innovation, new value-creating solutions that help your 
                companies top and bottom line? Do we encourage this behavior?
How are we actively driving down costs, shortening supplier lead time, and introducing new technologies to drive 
                continuous improvement?
Do we have a diverse supply network that offers wide-ranging capabilities and helps prevent risk?
Do our sourcing policies encourage collaboration with suppliers?  
Do our performance metrics set appropriate expectations with suppliers and act as indicators for management decisions?
Do we perform rigorous data analysis to guide and support supplier relationship management decisions?

Service Solution

Supply Chain Acuity’s Strategic Sourcing and Supply Management service helps our clients successfully leverage their supply base and key outsourcing providers to drive supply chain value.  In a strategic sourcing engagement, we help clients develop a sourcing strategy, conduct market analysis, create and administer an RFI or RFP, develop a negotiation strategy, develop a service level agreement, and initiate implementation.  When helping our clients manage a strategic outsource provider or contract manufacturer, we implement best practices for joint process improvement, internal and external collaboration, and the right financial and operational incentives to align mutual interests and shared risks and rewards.

Delivered Benefits and Desired Outcomes

Reduced overall category spend and total landed cost per raw material and components
Internal vendor management capabilities to effectively manage supplier capabilities
Vested outsourcing relationship with prime outsourcing providers to align mutual interests and incentives
Streamline routine procurement processes
Leverage technology to improve processes
Embedded sourcing process in the organization – sourcing/procurement representatives have a seat at the table to
                influence key business decisions early in the decision process
Fact-based decisions supported by rigorous data analysis and information accessibility
Define, monitor and measure key supplier performance metrics
Contingency planning; proactive risk prevention and mitigation strategies ready to be employed if necessary