Strategic Sourcing

News... 03 Feb U.S. Postal Service Extends Use of CombineNet's Advanced Sourcing Technology for Two More Years 31 Jan Decideware’s partnership with ADR International yields benefits for procurement professionals 27 Jan INSTITUTE FOR SUPPLY MANAGEMENT AND EMPTORIS TO HOST SEMINAR ON STRATEGIC SOURCING More News...

Strategic sourcing is a corporate/institutional Procurement process that continuously improves and re-evaluates the purchasing activities of a company. It is one component of Supply Chain management.

The steps in a Strategic Sourcing process are:[1]

Assessment of a company's current spend (what is bought where?)
Assessment of the supply market (who offers what)?
Development of a sourcing strategy (where to buy what, while minimizing risk and costs)
Identification of suitable suppliers
Negotiation with suppliers (products, prices)
Implementation of new supply structure
Track results and restart assessment (continuous cycle)
Strategic Sourcing was initiated by General Motors in the 1980s.

Outsourcing is a method that can be employed as part of the overall sourcing strategy for services. This involves the transfer of staff and assets to a company who them provide them back as a service.

Strategic Sourcing Tools

Sourcing Tools have been developed since the beginning of the year 2000 to support the Strategic Sourcing process. They have developed originally from a Reverse Auction functionnality to the full Spectrum of the Sourcing process, enabling an entire integration of electronic process. The tools often are presented a the following functionalities:

A Supplier Database with enrichment capabilities
A Classification System such as UNSPSC or eClass to "source" the supplier database
A collaborative environment for the purchasers to build the specifications
A publishing tool for RFi (Request for Information) or RFq (Request for Quote)
A An integrated Messaging system
A Reverse Auction Tool
An Electronic Negotiation module
An awarding functionality
A Contract Management Module.
[Spend Intelligence] analysis
The tool can be stand alone (accessible via a web page for example) or fully integrated to the Procurement process.

Sourcing Tools Providers
Many eMarketplaces were born from different industries as a Global Sourcing Strategy. Many industrial sectors had their own eMarketplace such as, for example,

Eutilia - For the Energy Market in Europe
MoreDirect.com-For the IT Industry
Chemikalia - For the Chemical Industry
The Rubber Network - The Tyre industry
Aquadia - European Water Utilities
Of these, few remains. The existing marketplace have developed certain different approaches, either by sector or by geographical location. Some are mainly software providers while some others are more service oriented.

Some major tool providers are:

Emptoris
Quadrem
Ariba
Moredirect.com
Procuri
Synerdeal

Source: Wikipedia
http://en.wikipedia.org/wiki/Strategic_sourcing