Creating a strategic sourcing plan involves several stages;
1- Needs Analysis
Clearly define your goals and objectives for the strategic sourcing plan, taking into account factors such as cost savings, quality, and delivery times.
2- Current Situation Analysis
Conduct a thorough assessment of your current sourcing practices, including an analysis of your current suppliers, contracts, and spend. Identify areas where improvements can be made.
3- Supplier Analysis
Potential suppliers are identified, evaluated, and ranked for suitability based on a number of factors, including:
· Financial performance and stability.
· Creditworthiness.
· Reputational issues.
· Current and historical compliance with industry and government standards.
· References supplied.
Once you have identified potential suppliers, negotiate with them to establish terms and conditions that meet your goals and objectives.
Select suppliers based on the outcomes of your negotiations and their ability to meet your goals and objectives.
4- Implementation
Implement the strategic sourcing plan by establishing contracts and agreements with selected suppliers and integrating them into your supply chain.
The best approach is to execute implementation in stages:
· Information Period: Preparatory education and training for staff, management, and vendors.
· Implementation Period: New processes are implemented and monitored.
· Review Period: Evaluation of adherence to the new processes and improvements realized.
· Revision Period: Additional training and refreshers as needed to secure full buy-in; formalized key performance indicators to measure performance and refine processes over time.
At this stage, strategic sourcing process has analyzed available supply markets, identified and categorized suppliers based on the criteria setted, and is ready to execute the processes that will integrate these suppliers into procurement process.
Communication and collaboration are especially important at this stage, as vendors need to know procurement expectations and the requirements , the plan set for both securing the business and doing business once the contract has been signed.
5- Monitoring and measuring
Continuously monitor and measure the performance of your suppliers and the strategic sourcing plan to ensure that it is meeting your goals and objectives.
6- Continuously improve
Continuously review and improve the strategic sourcing plan, taking into account changes in the market, technology, and your organization’s needs.
