What is strategic sourcing?

Strategic Sourcing is a procurement approach that focuses on identifying, evaluating, and selecting suppliers strategically to optimize an organization's procurement processes and achieve long-term objectives. It goes beyond cost reduction and involves considering factors such as supplier capabilities, quality, innovation, risk mitigation, and sustainability.

In a strategic sourcing process, organizations typically conduct thorough supplier assessments, market analysis, and risk evaluations. They seek to build collaborative relationships with key suppliers and align procurement decisions with the overall business strategy.

Strategic sourcing aims to maximize the value derived from supplier relationships, reduce total cost of ownership, and enhance supply chain resilience. It often involves cross-functional collaboration and the use of advanced procurement techniques and tools.