Strategic Sourcing Specialist

2 min read

Strategic sourcing focuses on how an organization selects suppliers and structures categories for long-term value.

It is different from routine purchasing because the work often includes market analysis, RFx, supplier evaluation, negotiation and total-cost decisions.

Role scope

Typical work can include:

  • spend/category analysis;
  • supplier market research;
  • sourcing strategy;
  • RFI/RFP/RFQ;
  • bid evaluation;
  • negotiation;
  • supplier selection;
  • contract handoff;
  • savings/value tracking.

Spend and category analysis

Start by understanding:

  • what is bought;
  • from whom;
  • in which business units;
  • at what volume/value;
  • under what contract;
  • with what price variation.

Bad supplier master data can hide fragmented spend.

Market research

Sourcing strategy depends on supply-market structure.

Consider:

  • number of capable suppliers;
  • geographic concentration;
  • switching cost;
  • capacity;
  • technology;
  • commodity exposure;
  • regulatory constraints.

Do not confuse internet price comparison with supply-market analysis.

RFx

Use:

  • RFI for information;
  • RFQ for defined price/terms;
  • RFP for broader solution evaluation.

The specification and scoring criteria determine whether the process is meaningful.

Supplier evaluation

Possible criteria:

  • cost;
  • quality;
  • delivery;
  • capacity;
  • technical capability;
  • risk;
  • financial health;
  • sustainability where relevant;
  • service.

Weights should reflect the category.

Negotiation

Negotiation can involve:

  • price;
  • volume;
  • payment terms;
  • lead time;
  • warranty;
  • service;
  • indexation;
  • tooling;
  • risk sharing.

Strong negotiators prepare alternatives and understand total value.

Total cost of ownership

TCO may include:

  • purchase price;
  • freight;
  • duties;
  • inventory;
  • quality;
  • tooling;
  • maintenance;
  • downtime;
  • disposal.

The cheapest quoted price may not be the best decision.

Contract handoff

Sourcing does not end at award.

Ensure commercial terms, operational expectations, service levels and responsibilities are transferred into execution.

Metrics

Possible measures:

  • realized savings;
  • cost avoidance;
  • supplier performance;
  • sourcing cycle time;
  • spend under management;
  • risk reduction.

Career path

Strategic Sourcing can lead to:

  • Category Manager;
  • Procurement Manager;
  • Supplier Manager;
  • Head of Sourcing.

The strongest evidence is a sourcing decision supported by supplier, market and total-cost analysis.

Related content

Sources