what is strategic sourcing in supply chain management

The second supply chain management step is sourcing. Before we can build a strategy for the supply chain we must initially identify our corporate strategy and how our consumers perceive 'value' from our product or service offering. Commodity Management includes responsibility for Supplier sourcing, relationship management, industry and market analysis, quotations, terms and conditions, negotiation strategy, and business awards. Supply Management: Strategic Sourcing - Supply Chain Indonesia In short, strategic sourcing is the process of finding the most suitable supplier for the job based on all of the organization's top criteria. Sollish & Semanik, (2011) claim that it is an old function and has had its roots from the commencement of purchasing philosophy, whereby traditional buying dealt with locating and hiring . It involves optimizing the sourcing process to align with the organization's goals, consolidating supplier lists, and driving efficiency throughout the supply chain. If you are in supply chain field, you should know that it's a major decision whether you outsource your production/function or perform in-house. sourcing typically generates savings . 5 Strategic Sourcing Objectives for Businesses ... What is Strategic Sourcing? For supply chain managers looking to maximize the effectiveness of today's complicated supply chains, strategic sourcing is a body of knowledge that can help increase efficiency and reduce costs. The network may therefore include locations and product flows across a single or multiple entities. Strategic Sourcing refers to making Supply Chain Management decisions with the intent to create distinctive value and to achieve a competitive advantage. Here is a Buyers Guide for strategic sourcing software that dives into more detail on how software can help. While the Commodity Manager is there to provide support their focus is more on the strategic management of the Supply Chain. The crisis is raising fundamental questions about whether firms are approaching such decisions in as comprehensive a manner as they think and exposing the myopic nature of the current . Strategic sourcing is an approach to supply chain management that formalizes the way information is gathered and used so an organization can use its consolidated purchasing power to find the best possible values in the marketplace and align its purchasing strategy to business goals. Strategic sourcing allows businesses to consolidate their purchasing power to achieve the lowest possible total cost of ownership and minimise risk to the supply chain. Instead of simply looking for good deals, strategic sourcing brings a larger approach to supply chain management in search of larger efficiencies. Increases Cost Savings—Strategic Sourcing is the act of comparing supplier prices against the quality of their product—saving companies the hassle of price-hunting while providing them with superior products. Reduce the number of product lines offered to lower complexity in the supply chain, and. The Supply Chain Management Specialization is made up of four basic courses in logistics, operations, planning, and sourcing, followed by a capstone course in Supply Chain Management Strategy. It stops short of the actual purchase of and payment for goods and services. Sourcing is an important part of managing a successful supply chain. Strategic sourcing aims to achieve the lowest Total Cost of Ownership (TCO) along with minimal supply chain risk. The supply chain is long and fragmented and the main challenges are long lead times, the risk of disruptions in transportation and the difficulty of ensuring the specified product quality. Strategic sourcing is a procurement process that connects data collection, spend analysis, market research, negotiation, and contracting. A sourcing decision should aim to increase the net value created by the supply chain. The outcome of the sourcing process is usually a contract or arrangement that defines what is to be procured, on . At the basic level, the sourcing strategy focuses on reducing the price paid to suppliers. Without strategic sourcing a firm will not and cannot maximize the potential of its supply chain and altogether meet the company's overall business goals. Strategic Sourcing Plan (10 Minute video). Strategic sourcing can be defined as a collective and organized approach to supply chain management that defines the way information is gathered and used so that an organization can leverage its consolidated purchasing power to find the best possible values in the marketplace. For example, P&G has historically outsourced retailing of its products to others. Strategic Sourcing is the core pivotal activity for purchasing and supply. The third parties increase the supply chain surplus by aggregating many products that customers need (not just P&G products) in a single retail store. In a previous post I discussed what Strategic Sourcing was all about, in today's post I would like to introduce what I call the seven steps to strategic sourcing. Consider changes in consumer buying habits, in particular the increased attention on origin of products. The Supply Chain Logistics course will cover transportation, warehousing and inventory, and logistics network design. Strategic Sourcing is a UC systemwide collaborative effort to drive value and increase customer satisfaction by enhancing product quality and service levels, while leveraging the UC buying power to significantly lower total costs. For example, P&G has historically outsourced retailing of its products to others. While traditionally the goal of sourcing has been to identify and award a supplier that best meets the business requirements and is the most cost effective, in 2020, the game changed dramatically. While procurement is the act of getting the goods and services a business needs, supply chain management is the management of the infrastructure and services required to get those things. Builds Supply-Chain Resilience—Be proactive, not reactive. The approach is a long-term process that is dependent on a continuous re-evaluation of the business's sourcing activities, analysis of the market and aligning business goals . It serves as a roadmap to procure the goods and services the organization knows it needs ahead of time, allowing procurement . Supply Chain Strategy or Strategic Supply Chain Management is defined as: "A strategy for how the supply chain will function in its environment to meet the goals of the organization's business and organization strategies". Strategic SCM What Is Strategic Supply Chain Management? Keep reading to learn more about this exceptional supply chain position and how to become one. This course introduces you to the exciting area of supply chain sourcing. OFPP Strategic Sourcing Strategic Sourcing (OFPP) A structured and collaborative process of analyzing an organization's spend and using the information to make business decisions about acquiring. As companies have had to navigate unprecedented supply and demand chain challenges, they've had to quickly revamp their supply chains to meet the needs of today and for the next six months. Category management, however, boasts of proactive executive support. Start studying Supply Chain Management Chapter 6: Strategic Sourcing. This list is not meant to be the . A critical goal of supply chain management is to optimize . It's an activity that necessitates collaboration from various divisions within the company. Advance sourcing and strategic supply chain management in the autonomous era 02/01/2021 Celebrating Black History Month: meet our strategic sourcing leader supporting the design and production of autonomous solutions for automotive applications. It is concerned with what needs to be purchased, why, when and where. As the core challenge of suppl y chain management is the remo val of barriers between the Improve quality & long term financial performance. Strategic procurement is a company-wide procedure that works to assure the timely delivery of goods and services in accordance with the company's business objectives while decreasing supply chain risk and cost. management professionals and requires extensive knowledge and competence. However, strategic sourcing is having a growing influence on supply chain management decisions with the intent to create distinctive value and to achieve a competitive advantage. 2. It involves optimizing the sourcing process to align with the organization's goals, consolidating supplier lists, and driving efficiency throughout the supply chain. In the advanced stage, spending is visible throughout the entire organization, and automated systems track the total cost of ownership. In strategic sourcing, a business gathers market intelligence on how to obtain supplies from reliable vendors in a cost-effective manner. This collaborative process enables a business to align its procurement strategy with its overall goals. Strategic sourcing enables organizations to leverage their consolidated purchasing power to find the best possible value in the marketplace. Strategic sourcing is a business activity in which a tactical method is used to procure materials required for consistent, high-quality supply-chain management. . Global sourcing of manufactured goods Many variables come into play when sourcing manufactured goods or component parts from another country. PeopleSoft Strategic Sourcing Oracle Oracle s PeopleSoft Strategic Sourcing is the application that drives more and better sourcing through online collaboration. This study aims to examine the effects of strategic sourcing (SS) on lean supply chain (LSC) and agile supply chain (ASC) strategies and investigate the role of these concepts on development of competitive performance.,A proposed research model and hypotheses are tested by using cross-sectional e-mail survey data collected from the manufacturing firms operating in Turkey. A strategic sourcing analyst is a supply chain management professional that collects and evaluates logistical data related to a company's products or services used in operations. Most strategic sourcing initiatives take about six to nine months and return three to five times their investment within the first year of implementation, but . Organizations rely on suppliers to provide the different raw materials to make their products. The concept is created to help supply chain managers and practitioners to improve, develop and implement strategic sourcing strategies. 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