Strategic sourcing report insights
A report from Aberdeen Group demonstrates how companies can implement strategic sourcing to drive down logistics costs and grow vendor and customer relationships throughout their whole organization.
Strategic sourcing is very different from standard product sourcing. It’s how your procurement group is attempting to gain the best cost, quality, and delivery times (or on-hand product) at the most competitive price.
According to the How to Build a Strategic Sourcing Organization report, created by the Aberdeen Group, logistics & supply chain professionals should follow 5 steps in order to build a solid strategic sourcing program:
- Get a clear understanding of your spending. understanding what is purchased, for how much, who owns it, and where it was procured. This allows you to perform analysis and target your spend categories across the organization. Standardization of this data will help develop a true understanding of your spend ranking and where you are compared to the market.
- Rank your carriers. Analyze your supplier network. Order your carriers based on freight spend. Most likely your will discover that the majority of your spend will be with a few key suppliers.
- Analyze your top carriers.Define your supplier network by who offers the best total cost, highest quality, location, design options, value-added services, finance terms, dynamic discounting. Furthermore, take a closer look at service levels, time delivery rates.
- Implement new knowledge to buying habits. With your freshly obtained knowledge, the carriers that have the best portfolio for your business, both on cost and service level, return to the market and secure capacity accordingly.
- Keep improving. Take advantage of savings and greater spend with the customer-supplier relationship and view ways to improve processes on both sides.