Transcription of What is Strategic Sourcing?
1 What is Strategic sourcing ? Definition: A systematic and fact based approach for optimizing an organization's supply base and improving the overall value proposition. What it is What it is NOT. Focused on the Total Cost of Ownership (TCO) incorporating Focused ONLY on cost customer needs, organizational goals, and market conditions G tti th b t Getting the best product/service at the best value d t/ i t th b t l G tti th h Getting the cheapest product/service t d t/ i Driven by a rigorous and collaborative approach Ad hoc activities involving only purchasing Addresses all levers for savings Focused on beating up suppliers.
2 Decisions based on fact based analysis and market Decisions based on fact based analysis and market Decisions based on opinion, unjustified preference, Decisions based on opinion unjustified preference intelligence or complacency A continuous process A one time project or decision Page 1. Scope of Strategic sourcing ? The scope of Strategic sourcing extends beyond supplier price negotiation and takes into account the total cost of ownership Amount paid to suppliers Purchase Price Demand Drivers Specifications ocu e e t Procurement Total Inventory Inventory Practices acquisition cost Practices Internal Internal Policies Processes Operational Operational & Procedures Practices Page 2.
3 Advantages of Strategic sourcing ? Best practice sharing Create C t partnerships with Cost savings suppliers Access Strategic Increase to new sourcing quality suppliers Improve operational Spec efficiency ffi i Standardize pricing Copyright 2010 Accenture All Rights Reserved. Page 3. Objectives of Strategic sourcing ? Objectives of Strategic sourcing surround the reduction of cost while maintaining Obj i f i i d h d i f hil i i i or improving quality Improve the value to price p p Understand category buying & U d t d t b i &.
4 Relationship ( achieve cost management process to identify reductions while maintaining or improvement opportunities improving quality/service). Objectives Develop & implement multi year Examine supplier relationships contracts with standardized terms across the entire organization and conditions across the organization Share best practices across the Share best practices across the Leverage entire organization's spend organization Page 4.
