If you work in procurement or finance, the chances are that you’ll be looking for creative ways to reduce costs and assure service and product quality. Strategic sourcing is one method that managers can use to help achieve these goals.
Strategic sourcing is the continual process of measuring, evaluation and improving the purchasing activities of a company. It is one of the most powerful tools that purchasing professionals and businesses have available to bring significant bottom-line results to a company.
Rather than taking a reactionary or fulfilment approach to purchasing, strategic sourcing takes a proactive, data-driven approach. So why aren’t more organisations employing this technique to office supplies purchasing?
Although essential for business, often office supplies are seen as a tactical commodity. However today office supplies is about so much more than pens and paper – the category encompasses a huge range of products and services, from personalised print to furniture and facilities supplies.
The bottom line is that true strategic sourcing takes considerable resources to carry out. Resources that the charities, law firms and businesses we help simply don’t have.
“We need 100 A4 pads, let’s find the best price,” versus
“Last year we needed 100 A4 folders in Q4. Here’s what we spent on it. Let’s review how many we will likely need for the year. Let’s negotiate the best price and ensure the same quality and value.”
Strategic sourcing achieves efficiencies by formalising the way spend information is gathered, analysed and factored into the procurement process. By nature, it considers factors far beyond the cost of a product or service. Driven by experience, evidence and fact, strategic sourcing eliminates the potentially high cost of emotion-based procurement decisions.
This approach allows us, on behalf of our clients, to secure the best value in the marketplace as well as long-term sustainable pricing.
To implement a successful strategic sourcing plan in your business, it’s important to understand the key elements:
Strong management of suppliers incorporates a scoring process to measure specific performance areas such as product quality, delivery time, customer service and more. Additionally, regular supplier meetings help to forge long-term relationships, improvement plans and address any issues.
While strategic sourcing can prove time-consuming for small teams, the rewards are numerous. Outsourcing to firms such as Red Herring can help you to gain the benefits, without bringing additional workload to your team.
If you are looking to reduce costs or improve service, identifying the best supplier is important. However, there is more to strategic sourcing. We always aim to build a positive and long-term relationship by working closely with a strategic team, which has provided improved outcomes for our clients.
Book a meeting to find out how you can reduce costs, spend smarter and achieve long-term savings.get in touch
One of our core values at Red Herring is being a business for good. This means that we raise money by donating 10% of all fees earned to the Multiple Sclerosis Society. After a recent diagnosis, this cause is close to our hearts and we are proud to support the UK’s leading MS charity that provides practical help today and the hope of a cure tomorrow for everyone living with multiple sclerosis (MS) nationwide.
Over 100,000 people in the UK have multiple sclerosis (MS). It’s unpredictable, and different for everyone. It’s often painful and exhausting, and can cause problems with how people walk, move, see, think and feel. It can make it hard for people to work, and do the things they enjoy. But it doesn’t have to be this way.
The MS Society is a community of people living with MS, scientists, campaigners, volunteers and fundraisers. We understand what life’s like with MS, and we support each other through the highs, lows and everything in between. And we’re driving research into more – and better – treatments. For everyone.
Together, we are strong enough to stop MS.
To find out more about MS please visit: www.mssociety.org.uk