Krinati Solutions

  How do you achieve success with strategic sourcing? What do you need to do to be successful with strategic cost reduction? This article outlines some of the best practices on how to effectively perform strategic sourcing, so you can achieve your goal of lowering your costs without sacrificing the quality or reliability of your supply chain. What is Strategic Sourcing? Strategic sourcing is a process used by organizations to identify and secure the best possible channels of supply for their goods and services. It involves analyzing, negotiating, and managing all aspects of the procurement process, from product selection to delivery. The goal of strategic sourcing is to maximize business value and savings by reducing costs, increasing efficiency, and improving supplier relationships. The success of strategic sourcing requires a joint strategy between the buyer and supplier. This entails a comprehensive analysis of the buyer’s strategic spend – what they spend money on and how much they

  It is up to the buyers to enforce practices in their sourcing process that build trust with suppliers. These practices assume greater importance when companies resort to eProcurement. Companies that have been successful in building a credible eSourcing initiative tend to adopt the following practices. These practices have been shown to encourage suppliers to participate in a fair and competitive manner. Buyers agree to the following steps that establish credibility Detail out the requirements clearly. While the incumbent suppliers understand even the unstated requirements, the new ones wholly rely on the RFP for clarity. So explain the specifications and service level expectations as clearly as possible. Award only to the suppliers who bid online. Manage suppliers who don’t like to bid online with great urgency and importance. A handful of such suppliers can derail the entire  eSourcing platform   initiative. If lots (containing multiple line items) have been created and suppliers ar