What's Strategic Sourcing?

Is an institutional procurement process that continuously improves and re-evaluates the purchasing activities of a company.

Strategic sourcing is a process where you value and monopolize and utilize historical financial data to understand the business needs, market trends and prepare a future strategy. Your main goal is to think how you will spend this money more wisely and what are the best ways available to maximize the value of my business (spend). It is a planning process that's usually applied in large global organizations as part of leveraging their negotiation power.

A method of managing procurement processes for an organization in which the procedures, methods, and sources are constantly re-evaluated to optimize value to the organization. Strategic sourcing, which is considered a key aspect of supply chain management, involves elements such as examination of purchasing budgets, the landscape of the supply market, negotiation with suppliers, and periodic assessments of supply transactions.

1. Strategic sourcing is an institutional procurement process that continuously improves and re-evaluates the purchasing activities of a company. In a production environment, it is often considered one component of supply chain management.

For me it is evaluating the needs of the company and finding the same or better quality product for a better price and a shorter lead time. I copied Wikipedia's definition below.

 

"Strategic sourcing is an institutional procurement process that continuously improves and re-evaluates the purchasing activities of a company. In a production environment, it is often considered one component of supply chain management. Strategic sourcing techniques are also applied to nontraditional areas such as services or capital."

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Based on Wikipedia, Strategic sourcing is an institutional procurement  process that continuously improves and re-evaluates the purchasing activities of a company. In a production environment, it is often considered one component of supply chain management. Strategic sourcing techniques are also applied to nontraditional areas such as services or capital.

Mere sourcing is to link the requirement with source. Strategic Sourcing adds refining of Suppliers, making their tiers, evaluation, rating , performance, their training, partnership, costing optimization etc.

strategic sourcing used for downsizing and cost reduction in mega corporations. This is often done to allow a business to arrange the use of its assets to best advantage, and allow the company to move closer to the achievement of its goals.