Strategic Sourcing is Supply Chain Solutions.
We need to understand the meaning of “sourcing” and “Strategic” before answering the question about what is strategic sourcing.
“Sourcing” means the buying of components or products from an outside supplier, often one located abroad.
“Strategic” means relating to the most important, general aspects of something such as a military operation or political policy.
Strategic sourcing is also call strategic purchasing in some cases. It is an approach to supply chain management that formalizes the way information is gathered and used so that an organization can leverage its consolidated purchasing power to find the best possible values in the marketplace.
Strategic sourcing requires analysis of what an organization buys, from whom, at what price and at what volume. It differs from conventional purchasing. Because it places emphasis on the entire life-cycle of a product, not just its initial purchase price.
For example, products made in China is famous as lower price. If you are planning to importing most of the main products from 2~3 suppliers or manufacturers in China, that is the strategic purchasing or sourcing.
Strategic sourcing is a complete procurement solutions, it includes supplier development, products sourcing, and relating issue solutions. The core of it is cost down and safety.
- Find a good manufacturer is easy, but it is not the best one for your projects or products.
- Discover products at low price is easy, too. However, it is not easy to find products at low price and good quality.
Along with the fast fierce development of the industry of manufacturing and supply chain, China have become the destination of strategic sourcing.