WhatisStrategicSourcing?Definition:Asystematicandfactbasedapproachforoptimizinganorganization'ssupplybaseandimprovingtheoverallvalueproposition.

Whatitis WhatitisNOTFocusedontheTotalCostofOwnership(TCO)incorporatingcustomerneeds,organizationalgoals,andmarketconditions

FocusedONLYoncost

G tti th b t d t/ i t th b t l G tti th h t d t/ iGettingthebestproduct/serviceatthebestvalue Gettingthecheapestproduct/service

Drivenbyarigorousandcollaborativeapproach Adhocactivitiesinvolvingonlypurchasing

Addressesallleversforsavings Focusedonbeatingupsuppliers

Decisions based on fact based analysis and market Decisions based on opinion unjustified preferenceDecisionsbasedonfactbasedanalysisandmarketintelligence

Decisionsbasedonopinion,unjustifiedpreference,orcomplacency

Acontinuousprocess Aonetimeprojectordecision

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ScopeofStrategicSourcing?Thescopeofstrategicsourcingextendsbeyondsupplierpricenegotiationandtakesintoaccountthetotalcostofownership

PurchasePrice

Demand

Amountpaidtosuppliers

Drivers

Specifications

Procurement InventoryTotalocu e e t

PracticesInventoryPractices

OperationalInternalPoliciesInternalProcesses

acquisitioncost

OperationalPractices&Procedures

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AdvantagesofStrategicSourcing?

Bestpracticesharing

C t

Costsavings

Createpartnerships

withsuppliers

StrategicSourcing

Increasequality

Accesstonewsuppliers

SpecImprove

operationalffi i

Standardizepricing

efficiency

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ObjectivesofStrategicSourcing?Obj i f i i d h d i f hil i i i

Improvethevaluetoprice U d t d t b i &

Objectivesofstrategicsourcingsurroundthereductionofcostwhilemaintainingorimprovingquality

p prelationship(i.e.achievecost

reductionswhilemaintainingorimprovingquality/service)

Understandcategorybuying&managementprocesstoidentifyimprovementopportunities

ObjectivesObjectives

Examinesupplierrelationshipsacrosstheentireorganization

Develop&implementmultiyearcontractswithstandardizedterms

andconditionsacrossthe

ObjectivesObjectives

Share best practices across the

organization

Leverageentireorganizationsspend Sharebestpracticesacrosstheorganization

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