Sourcing can seem like a juggling act for businesses. The methods that seem to work well during flush times can bottom out, or even make the business unstable, during those times when turbulence reigns. Establishing appropriate strategies that can weather those times that are turbulent and provide an even keel onto which to build a strong platform of sources.
1. Know the Benefits of Strategic Sourcing
As UPS Supply Chain Solutions points out, strategic sourcing helps a business identify the types of suppliers that enable them to source the right services and items from will help them meet their goals. Only after a strategic sourcing plan is implemented can the management of purchasing and otherwise procuring supplies manifest itself effectively.
2. Determine the Factors to Consider for Strategic Sourcing
When evaluating a source for procuring needed supplies, a business needs to consider numerous factors. The quality of the company’s output as well as its cost immediately come to mind. However, the reality is much more complex than that. The logistics — both inbound and outbound — involved could add unseen and unintended costs by increasing the time that supplies are received, for example. Service levels, safe and environmentally-friendly disposal and warranty policies are other factors that must be considered as they could increase the cost of doing business with a particular source.
3. Delivering the Intended Results
Searching for acceptable suppliers means that the business experiences growth, financial stability and profitability while improving its brand image and positioning itself competitively within its industry. Successful sourcing establishes a foundation from which a business can launch new services and products that meet the parameters established. By successfully managing demand and reducing costs to capture the sourcing margin that best benefits the business ensures that the process delivers the intended value.
This framework outlined above establishes a cooperative relationship between the business and its suppliers. This benefits the business while still ensuring that it has the flexibility to meet its goals.