6 Essential Steps to Take for a Successful Sourcing Strategy
A sourcing strategy is a means of obtaining the products (or services) you need at the best price. To do so successfully, you want to secure the products effectively and in a way that minimizes any risks.
How do you do this? Follow these 6 essential steps for a successful sourcing strategy.
- Perform a Spend Analysis
Before you can determine what changes you need to make to your current system, it is important to analyze your spending. Take a look at your expense data to see your procurement costs. What are you spending your money on? What can be done to make things more efficient – and cost-effective?
All of this needs to be taken into consideration.
- Do Your Research
You never want to just assume that your suppliers are giving you the best deal. Instead, you want to do some digging. You want to look at the suppliers that you currently have – as well as others in the pool.
By doing a supplier market share analysis, you can work your way through all the available supplier options to find the one that meets your needs.
- Solicit Bids – and Negotiate
Once you have narrowed down your suppliers, it is time to get yourself the best deal. After all, your sourcing strategy needs to include suppliers that are cost-effective. They will get you what you need while also benefiting your bottom line.
This process involves sending out requests for proposals to potential suppliers from your market research. This opens the door to communication, as well as negotiation. Gather the information from your suppliers, choose the ones you are most interested in, and get talking.
Keep in mind that you never just want to choose one supplier because you don’t want to be left without your goods and materials. Instead, be sure you have multiple suppliers to choose from so that you have the confidence you will never be without what you need.
- Implement the process
When you have your chosen supplier or suppliers, it is time to start implementing the process. This is the perfect time to do your vetting and make sure that the supplier is in compliance with all regulations, laws, policies, etc. And get them set up within different departments of your company, such as finance, receiving, etc.
Taking the time to do this now ensures that as you continue to do business in the future, everything can go smoothly.
- Continue to Monitor
Once you get a strategic sourcing process in place, you have to monitor it. You can’t assume that it is the most efficient and the best choice just because you followed all the steps. Any little change, whether in your company, with the supplier, with the mode of transportation, and so forth can impact everything else.
Continue to monitor and re-evaluate your processes, as well as make changes when necessary.
- Hire a Procurement Company
If you want to ensure that you are getting the best product at the best price without having to worry about creating multiple contracts with different suppliers in a limited area, then you need a procurement company. Preferably one that is global.
In this instance, you can feel confident that you will:
- Always have what you need
- Have the most efficient means of obtaining it
- Not run the risk of only having one supplier
- Not have to negotiate contracts and build rapport
- Have a wider network of available suppliers
When coming up with your strategy, this is often a highly effective step to take.
Let DXL Enterprises Be Part of Your Sourcing Strategy
We welcome the opportunity to help you fulfill your successful sourcing strategy.
At DXL Enterprises, we get you what you need, when you need it, and where you need it. This is our specialty – with a global network of suppliers across all industries.
Learn more about our services today. Contact us at (201) 891-8718.