Strategic sourcing involves creating supply channels and determining the lowest total cost. However, it’s not just about finding the lowest purchase price but developing a relationship with suppliers to address your specific challenges. In this article, we’ll explore how to create a strategic sourcing plan and how to find the right vendor for your organization.
Developing channels of communication with suppliers
It helps a business identify potential suppliers and determine which ones to choose. The process also helps identify risk mitigation strategies. Once a supplier has been selected, arrangements are formalized through a signed contract. These contracts can be generated based on pre-prepared information or a Request for Proposal (RFP).
Strategic sourcing allows an OEM to develop long-term relationships with suppliers. Suppliers are selected based on their capabilities and compatibility with the company’s needs. This ensures a more efficient transaction model and more reliable components. In addition, strong relationships make identifying and managing risk, forecasting sales, and dealing with component shortages easier.
Gathering information about suppliers
Strategic sourcing is a process in which businesses look for the best supplier options while minimizing risk and cost. The process involves evaluating a company’s needs, goals, and current and prospective suppliers. It starts …