Sourcing strategically – Raising the stakes
Strategic sourcing, which is considered a key aspect of supply chain management, involves elements such as examination of purchasing budgets, the landscape of the supply market, negotiation with suppliers, and periodic assessments of supply transactions. Successful execution of a sourcing project requires sourcing teams to wade through numerous challenges in today’s competitive and challenging global environment.
Some of the challenges that daunt sourcing professionals today when it comes to successful execution of sourcing events that add value to the organizations are as follows.
- Speed: To move fast enough and encash the first movers benefits.
- Globalization: To develop capabilities to source, build and sell anywhere in the world.
- Volatility: To build mechanism to confront the unpredictable nature of raw material prices, natural disasters, politics etc.
- Transitory: With the reduced product life cycle, each stage demands a unique procurement approach.
With these challenges and more, sourcing teams today are in need of advanced e-sourcing solutions that will help in not only addressing the above challenges but also more importantly add value to the sourcing process.
- Reduction in cycle time: Enables reducing souring cycle time drastically by quickly creating an event using robust and scalable RFX engine, eliminating manual analysis and providing instant visibility into savings and event statistics. An Industrial automation and control company managed to reduce its sourcing cycle time from 5 months to 1 month by deploying e-sourcing solution.
- Becoming global: Handle large volume of data on market, labor, financial risk, suppliers’ etc, ability to conduct an online event inviting large nos. of suppliers from across the globe and an opportunity to collaborate with suppliers on a common platform.
- Determining Total Cost of Ownership: Determine the total cost of ownership by incorporating hard data about supplier into the solution, inviting key personnel like logistics, engineering etc to ascertain importance of key sourcing factors, sourcing all categories like BOMs, cost breakdowns etc electronically and analyzing decisions made.
- Controlling sourcing process: Ensure control over the entire sourcing process to enable high quality output by embedded project management and global monitoring functions.
- Integrating business intelligence: Integrating various sourcing related information like historic spend data, market information, supplier performance etc to come to a logical business award and allocation decision.
Thus, the eSourcing solution provides an edge to the sourcing team by presenting them with multifold features which help them to overcome the challenges faced by sourcing professionals.
Further reading, Raising the stakes for e-sourcing.