Written by: Trade Interchange
Posted on: 09/04/21
Should you adopt strategic sourcing processes?
Many organisations still use basic spreadsheets and other ineffective, disparate systems to manage their procurement activities. As a result, these businesses are not leveraging total purchasing power due to insufficient and inaccurate data.
What is strategic sourcing?
Strategic sourcing is the process of continuously re-evaluating and improving the purchasing activities conducted by a business, and it places emphasis on the entire product lifecycle, rather than just the initial purchase price. There are many important reasons as to why adopting strategic sourcing is a smart move for businesses that are looking to streamline their entire procurement process.
The practice is becoming increasingly popular due to the introduction of digital procurement solutions, which enables those with responsibility for purchasing projects to centralise all important sourcing information into a secure, cloud-based database.
Benefits of strategic sourcing
There are a variety of reasons as to why a company may want to adopt strategic sourcing processes, and even though it is undoubtedly a huge driver for doing so, they are not all directly related to making cost savings.
Strategic sourcing helps procurement professionals to take a longer-term approach to their purchasing activities, such as eRFXs and eAuctions, as the method allows these businesses to gather accurate data over time to make more informed buying decisions.
Additionally, building strong and trustworthy relationships with suppliers is vital for success. By incorporating strategic sourcing processes, a business can improve rapport within its supply chain as future procurement requirements are laid out ahead of time. This can lead to faster lead times, higher quality, and more reliable order fulfilment, and increased flexibility in negotiations.
Ultimately, strategic sourcing enables procurement departments to improve the consistency of tasks, reduce risk, and enhance quality and efficiency across their entire range of purchasing activities.
How can ARCUS® SSM help?
ARCUS® SSM is a cloud-based software solution that provides complete visibility over all current and planned procurement projects.
Using Task Intelligence, the bi-directional workflows can schedule tasks based on attributes of a company’s specific sourcing project, such as spend, category, whether tendering online, re-negotiating with an incumbent supplier, or simply extending the existing contract.
Dan Urwin, Head of Procurement & Supply Chain Performance at Whitbread, says this about the solution:
“Using ARCUS® SSM, our procurement team now has a complete overview of all current and potential sourcing projects. This allows us to easily view the current status of each of these projects, while helping us to ensure best procurement practice is practiced by everyone at Whitbread.”
If you would like to find out more about ARCUS® SSM and how it can streamline your organisation’s strategic sourcing processes, you can download the “Why ARCUS® SSM?” document by completing the short form below.