Different companies have started to welcome back employees to the office after two years of the havoc created by the pandemic. In this new era of hybrid working, strategic sourcing teams are the unsung heroes. Why? Even though their job is working from behind the scenes, they control the company’s sourcing and procurement channels.
However, during the pandemic, supply chain disruptions have badly affected the success of businesses. It has brought procurement under the spotlight, highlighting how curbing risks is crucial for the business. Besides, it also focuses on how a stable and solid business relationship with suppliers is a bonus.
Down below are the seven steps to effectively implement sourcing strategies in your organization.
1Identifying and Categorizing Expense Areas
To initiate the strategic sourcing process, companies must first identify their spending or expense areas. These need to be categorized on whether they are too critical/non-critical. Doing this will ensure that your company understands when to prioritize a particular sourcing activity. A solid sourcing strategy will also help analyze risks associated with the chosen category.
2Developing the Sourcing Strategy
The next step is developing the sourcing strategy to determine how each expense area will be approached. This involves understanding how to identify business requirements to appropriately necessitate spending goals and objectives and building a communication workflow with stakeholders. It helps stakeholders have clear visibility of upcoming business updates.
3Analyzing the Supplier Market
Analyzing the supplier market is crucial to understanding how existing suppliers flare. The process includes analyzing how each supplier has a distinct market share, a definite market standing, and overall performance in the industry. Evaluating risk factors and opportunities centering on the supplier market is also essential.
4Communicating with the Supplier for Business Requirements
Once the supplier market research is completed, it is crucial to convey the exact business requirements to them. That also includes mentioning end-goals and performance expectations so that the supplier understands precisely what your company wants. Your company should get an accurate roadmap from the supplier’s end besides developing strategies tailored to meet business objectives.
5The Contracting Process with Suppliers
After the selection process completes, your company needs to figure out which suppliers can provide the best ratio of cost savings and unmatched quality. Based on that, your company can shortlist suppliers and start with the contracting process to welcome them on board.
6Tracking Suppliers’ Performance
Strategic sourcing does not end after choosing a supplier and completing the onboarding. The company constantly needs to track its suppliers to ensure that they are meeting the fixed business requirements and objectives. Periodically tracking supplier performance will also show your company areas where there are chances for improvement.
7Developing the Supplier Relationship Management (SRM)
The last step of implementing a definite sourcing strategy is to develop Supplier Relationship Management. It ensures that the communication and relationship between the company and its suppliers form a loop instead of being a one-way road. SRM truly enhances the way a company collaborates with suppliers at all levels.
Hiring a consultancy firm is the best way to get started with strategic sourcing solutions. They will guide your company in the best way possible, keeping your business interests in mind. In every way, hiring an expert company is a better way than working on implementing it solo.