Strategic Sourcing & SRM
Strategic Sourcing is a supply chain management approach different from traditional procurement. It aims at focusing on the total cost of ownership instead of just the lowest purchasing price.
The strategic sourcing process aims at developing channels of supply by formally gathering information about the marketplace in order to find the best attainable values. It uses market intelligence power and the digital transformation lever to analyze what to buy, from whom, at what volume and what price. It expands its activities from a transactional process to a more strategic approach.
It also puts emphasis on building relationships with suppliers and striving to achieve mutual benefits and higher levels of performance.
The strategic procurement process aims also at continuously improving, re-evaluating and re-engineering the procurement activities within the organization by looking at most innovative methodologies and systems to deliver excellence and add effective value.
The ultimate objective is to align procurement strategy with the business strategic plan and to maximize the organization return on investment ROI.
Supplier Relationship Management, known as SRM, is a structured process to evaluate suppliers’ contributions to the business operations and value add to the organization success. It helps identify the suppliers that are key to the business and scrutinize the ones that are performing well from the ones that are not. SRM’s objective is to build and foster collaborative relationships with suppliers aiming at achieving mutual benefits for both parties. Through SRM, procurement engages with its supplier through streamlined processes to improve business efficiency for both parties.
The strategic sourcing & SRM process involves various activities such as:
- Procurement Planning
- Market Research
- Suppliers Prequalification
- Supplier Classification
- Supplier Selection
- Supplier Development
- Contract Negotiation
- Outsourcing
- Supplier Performance Management
At Strategyah, we assist our clients in developing and optimizing the above processes and streamlining the related steps to ensure effective strategic sourcing and SRM implementation.