- Understanding the category. Clearly define the sourcing category or commodity. ...
- Know the supply market. ...
- Develop a sourcing strategy. ...
- Select a suitable sourcing process. ...
- Selecting a supplier and negotiating terms. ...
- Implement and integrate. ...
- Reporting and tracking results.
What is the first stage of sourcing?
Step 1: identify what’s needed
Before you can have something procured, there has to be a need for it. Hence, the first stage in the procurement process is recognizing the need for a product (a brand new item, or something the company is re-ordering) or a service.
What are the steps in sourcing?
- Step One: Understand the Spend Category. ...
- Step Two: Supply Market Assessment. ...
- Step Three: Collect Supplier Information. ...
- Step Four: Develop the Sourcing Strategy. ...
- Step Five: Negotiate and Select Suppliers. ...
- Step Six: Communicate and Implement. ...
- Step Seven: Benchmarking.
What are the seven 7 Steps in Strategic Sourcing?
- Step 1 – X Ray Phase | Fully understand the spend category. ...
- Step 2 – Supply Market Analysis. ...
- Step 3 – Develop the Sourcing Strategy. ...
- Step 4 – Start Sourcing Process. ...
- Step 5 – Negotiation and Selection. ...
- Step 6 – Communicate & Implement. ...
- Step 7 – Benchmarking.
Which is the first step of the strategic sourcing process?
The first step within strategic sourcing includes understanding your organisation’s current needs and strategy and then comparing this to how your procurement process is currently operating . Be sure to consider areas within your current budget where you believe costs can be reduced.
What are the six sourcing strategies?
- Outsourcing. Having suppliers provide goods and services that were previously provided internally.
- Insourcing. Delegating a job to someone within the company.
- Nearsourcing.
- Vertical integration.
- Few or many suppliers.
- Joint ventures.
- Virtual enterprise.
What are some examples of sourcing?
- Low-cost Country Sourcing. ...
- Global Sourcing. ...
- Prime/Sub Arrangements. ...
- Captive Service Operations. ...
- Conventional Agreements. ...
- Operational. ...
- Professional Services. ...
- Manufacturing.
What are the 7 stages of procurement?
- Step 0: Needs Recognition.
- Step 1: Purchase Requisition.
- Step 2: Requisition review.
- Step 3: Solicitation process.
- Step 4: Evaluation and contract.
- Step 5: Order management.
- Step 6: Invoice approvals and disputes.
- Step 7: Record Keeping.
What are the two steps of sourcing?
- Identifying potential suppliers;
- Screening these suppliers and verifying the last candidate(s).
What is key sourcing?
Strategic sourcing is a cyclical process of gathering and analyzing information about a company’s buying requirements and suppliers’ markets along with individual vendor performance in order to find the most suitable sourcing partners for a company’s unique business goals.
What are the 6 R’s of purchasing?
Right Quantity 3. Right Time 4. Right Source 5. Right Price and 6 .
What is the strategic sourcing process?
Strategic sourcing is a procurement process that connects data collection, spend analysis, market research, negotiation, and contracting . It stops short of the actual purchase of and payment for goods and services.
What are the five steps involved in vendor selection framework?
- Analyze your business requirements. ...
- Search for a vendor. ...
- Write a Request for Proposal (RFP) & Request for Quotation (RFQ) ...
- Evaluating the proposal & selecting the vendor. ...
- Creating a contract negotiation strategy.
What are sourcing activities?
Sourcing describes all those activities within the procurement process concerned with identifying and evaluating potential suppliers , engaging with selected suppliers and selecting the best value supplier(s).
What are the 5 core processes for strategic sourcing?
- Utilization Management.
- Vendor Strategy Development.
- Spend Aggregation.
- Objectively Informed Negotiation.
What are the risks of single sourcing?
Cons of Single Sourcing
If there is only one source, it is more difficult for the buyer to ensure that they are keeping their company competitive. In periods of tight supply, the buyer may be at a disadvantage in being able to ask other suppliers to accept orders .
