Strategic Supplier Sourcing

Filed in archive Supplier sourcing on January 19, 2012

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The strategic importance of supplier sourcing is sometimes ignored in business decision making. Strategic sourcing involves uncovering methods of procuring the best products and services at the best value. The best place to begin this analysis is to drill down into an organization's spending. Identify what is spent on different products or services and who the suppliers are, and then compare these to alternative sources.

Once these alternative suppliers are found, it may be best to switch to them, or alternatively this information could be used as leverage to renegotiate contracts with existing suppliers. It is important when thinking about the cost of a product that the total cost of ownership is taken into consideration before a purchase decision is made. As global economic circumstances are forcing many firms to find new ways of cutting costs while maintaining the same level of products and service, strategic sourcing is gaining in importance as a concept.