Strategic Sourcing: Enabling the Enterprise
By Bill Benedict
Go ahead; ask the hard questions, after all your Supply Chain is only as strong as its weakest link. Are there ways to strengthen your Supply Chain? Most companies do business with others for any number of reasons: Convenience, cost, relationships, reputation, friendship etc. Do you buy from vendors for the right reasons?
These simple questions are just a start. You need to closely scrutinize your Supply Chain process. And you need to ask tough questions to create a successful system. Finding the right answers will enable you to begin the process of strategically consolidating and managing your supply base and provide value and success to the Enterprise.
Most experts agree that the value derived from a successful relationship is underrated- but critically important to the ongoing success of any organization. Defining and assigning a business value to the relationship is essential. To do this successfully, you should ask the following questions of your Enterprise:
- How many suppliers are you doing business with and how many are for common purchases- or could be?
- Have you established a Sourcing Strategy?
- What are your criteria for selecting new suppliers?
- How do you manage the Sourcing process?
- What is your plan for the efficient integration between your company and your supplier?
- Do you have a defined Procurement process?
- Have you established the right legal terms, policies and practices to govern the strategic supplier relationship?
- Do you have KPI’s? And are they current and relevant?
- Do you have a Contract Management practice?
Now ask yourself some questions from a big picture perspective. What does this mean to my organization? Selecting the right partners will produce meaningful results to the profitability of the enterprise. So keep in mind, finding the right partner is as important as keeping them…
These points coupled with the proper execution of the basic principles of Supply Chain Management will reduce costs associated with procurement of goods and services while improving the quality of the delivery, overall productivity, and client satisfaction.