Strategic Sourcing: Building a Foundation For Success

With the increase of on line buying and sourcing of goods and services, educators, consultants, writers, and industry leaders have spent a great deal of time and resources attempting to improve the identification and selection of suppliers and the associated purchasing processes.

Today, some of the most commonly heard terms for buying include:

• Sourcing
• Strategic Sourcing
• e-Sourcing
• Purchasing
• Procurement
• e-Procurement
• Supplier Management
• Supplier Relationship Management
• Supply Base Management

Sourcing by identifying and locating suppliers is relatively simple, but it becomes more complex as the amount of unique raw materials, ingredients, parts, components, connectors, apparatus, products, equipment, supplies, and services increase and the numbers of buyers involved in the decisions expand. In a global enterprise, it is possible for one purchasing decision to impact numerous business processes or departments including manufacturing, receiving, distribution, marketing, sales or customer support.

The risks of buying the wrong items, services or from the wrong supplier can have major impacts and ripple throughout a business. Consequences can range from late delivery to total service failure liability and can even affect market competitiveness. In addition, if the selected suppliers cannot provide opportunities to reduce costs, improve and upgrade product/service offerings or provide other market-facing advantages, then an organization can quickly find itself losing market share.

To help clarify the confusion, UPS Supply Chain Solutions is offering insights into the optimum approach to buying. Often known as Strategic Sourcing, it begins the critical process and lays thefoundation for creating value through the purchasing process.