What is a Sourcing Strategy?
A sourcing strategy is the set of activities that organizations undertake to identify, evaluate, and select suppliers. It involves researching the market, assessing suppliers, and selecting the best supplier to meet the organization's needs. The strategy should consider the organization's specific needs, goals, and objectives, as well as the current market conditions. A well-crafted sourcing strategy can help an organization reduce costs, increase its competitiveness, and find new sources of value.
What's included in this Sourcing Strategy template?
- 3 focus areas
- 6 objectives
- 6 projects
- 6 KPIs
Each focus area has its own objectives, projects, and KPIs to ensure that the strategy is comprehensive and effective.
Who is the Sourcing Strategy template for?
This Sourcing Strategy Template is designed for procurement professionals who need to identify the most cost-effective sources for their products. It provides guidance on how to develop a comprehensive plan to ensure the organization's goals are met, and can be used to evaluate, select, and manage suppliers. It also provides the necessary tools to help the organization measure and track the success of their strategy.
1. Define clear examples of your focus areas
When creating a Sourcing Strategy, it is important to identify and define specific focus areas. These areas should be related to the organization's strategic priorities. Examples of focus areas may include cost reduction, supplier lead times, technology and automation, supplier relationships, and more.
2. Think about the objectives that could fall under that focus area
Once you have identified the focus areas, you can begin to set objectives. Objectives should be specific, measurable, achievable, and relevant. They should be linked to the focus area and should help you meet your overall goals.
Examples of some objectives for the focus area of Source from most cost-effective suppliers could be: Reduce supplier costs, and Reduce supplier lead times.
3. Set measurable targets (KPIs) to tackle the objective
Once you have established the objectives, you can set Key Performance Indicators (KPIs) to measure progress. KPIs should be SMART (Specific, Measurable, Achievable, Relevant, and Time-Bound). They should be linked to the objectives and should help you track and measure your success.
An example of a KPI for the focus area of Source from most cost-effective suppliers could be: Reduce supplier costs from $5.00 to $4.50 in 6 months.
4. Implement related projects to achieve the KPIs
Once the KPIs are established, you can begin to implement projects to achieve the KPIs. Projects should be linked to the KPIs and should help you reach your objectives. Projects may include negotiating with suppliers, developing strong relationships with suppliers, or automating manual tasks.
An example of a project related to Source from most cost-effective suppliers could be: Negotiate with suppliers for better prices.
5. Utilize Cascade Strategy Execution Platform to see faster results from your strategy
The Cascade Strategy Execution Platform is a powerful tool that helps organizations develop, implement, and track their sourcing strategies. It provides the necessary tools to help you create a comprehensive plan, evaluate and select suppliers, and measure and track the success of your strategy. By utilizing the Cascade Strategy Execution Platform, you can see faster results from your strategy and achieve your goals more efficiently.