Strategic SourcingBY SAMANTHA COOMBS

Nine Points to Note

• Assessment of a company's current spending (what is bought, where, at what prices?).• Assessment of the supply market (who offers what?).• Total cost analyses (how much does it cost to provide those goods or services?).• Identification of suitable suppliers.• Development of a sourcing strategy (where to purchase, considering demand and

supply situations, while minimizing risk and costs).• Negotiation with suppliers (products, service levels, prices, geographical coverage, etc.).• Implementation of new supply structure.• Track results and restart assessment (continuous cycle).• Negotiate payment terms with vendors

Request for Proposal

• Informs suppliers that an organization is looking to procure and encourages them to make their best effort.• Requires the company to specify what it proposes to purchase. If the

requirements analysis has been prepared properly, it can be incorporated quite easily into the Request document.• Alerts suppliers that the selection process is competitive.• Allows for wide distribution and response.• Ensures that suppliers respond factually to the identified requirements.• is generally expected to follow a structured evaluation and selection

procedure, so that an organization can demonstrate impartiality