I hope that you have enjoyed the article \u201cThe 4 Missing Strategic Sourcing Goals.\u201d<\/p>\n
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\u201cThe company needs to save money.\u201d<\/p>\n
\u201cStrategic sourcing saves money.\u201d<\/p>\n
\u201cLet\u2019s do strategic sourcing.\u201d<\/p>\n
Such is the thought process behind many a strategic sourcing initiative since the phrase was coined. But, all too often, the strategic sourcing label has been applied to sourcing activities that were anything but strategic. If a sourcing process\u2019 lone goal is to save money \u2013 or, more specifically, to reduce purchase prices \u2013 it is not a strategic sourcing process.<\/p>\n
Imagine a sourcing process that leads to a 1% price reduction but the new supplier has such poor tech support that it leaves everyone in the buying organization frustrated, distracted from their core work, and suspicious of everything that the procurement department will do for the next three years. Is that strategic sourcing?<\/p>\n
Imagine a sourcing process that leads to a 2% price reduction but the new supplier can\u2019t deliver on-time, forcing the buying organization to increase its inventory levels by 20% just so it doesn\u2019t get caught in a stockout situation. Is that strategic sourcing?<\/p>\n
Imagine a sourcing process that leads to a 5% price reduction but the new supplier ships so many defective items that the buying organization\u2019s production line shuts down and it has to make emergency purchases from the just-ousted incumbent supplier. Is that strategic sourcing?<\/p>\n
None of those examples are strategic sourcing. Sourcing, maybe. Strategic sourcing? No.<\/p>\n
Don\u2019t let your own activities be the next example. Source strategically and address all of the strategic sourcing goals, not just saving money. Because when employees spend more time than necessary on tech support calls, or inventory has to be increased, or production lines shut down, any savings may be more than offset by additional costs.<\/p>\n
That\u2019s not strategic. That\u2019s not good.<\/p>\n","protected":false},"excerpt":{"rendered":"
I hope that you have enjoyed the article \u201cThe 4 […]<\/p>\n","protected":false},"author":12,"featured_media":4069,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-3061","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-procurement"],"yoast_head":"\n