Aspects of Sourcing and Purchasing Management

Strategic sourcing, or simply sourcing can be technically defined as a methodology that can be used in supply chain management. It helps in significant cost cuts and provides other benefits for the betterment of businesses. To be more specific, sourcing can well be termed as a periodic event that involves identification as well as selection of the preliminary commercial arrangements with a particular supplier that creates as well as redefines a long term business relationship. Strategic sourcing is basically the first step in the business ladder. And once it gets combined with an able purchasing management along with an effective set of day-to-day purchasing activities, the resulting outcome makes a world of difference for businesses.

In today’s time of cutthroat competition where there is hardly any room for laxity, an effective combination of purchasing management and strategic sourcing can very well be termed as a ‘deadly duo’ and is always used by the supply chain management experts to curve out new and innovative ways of cost-cutting and improving the quality of the end product or service, and to enjoy more time for marketing and promoting them, so as to gain a distinctive edge over their competitors.

Let us discuss various aspects of the combination of the two:

Identifying the suppliers

It is the responsibility of the effective purchasing managers to relentlessly locate the best materials in terms of quality and price from the most trustworthy suppliers. When it comes to identifying or defining the alternative suppliers, it is imperative that a track of all the logistical considerations is kept so as to make the most of them under certain external conditions prevailing in the market.

Another important factor that needs to be considered while identifying the suppliers is the opportunity of competitive differentiation. Using a certain specific supplier that enjoys a positive and popular brand image is always helpful, when it comes to creating a real opportunity of product differentiation, and that in turn leads the customers to prefer a certain product or service over other similar kinds of product or services available in the market.

Cultivation of relationships

Identification of the best suppliers is always important. However, strategic sourcing is not just limited to that. It also involves cultivation of positive as well as long lasting relationships with the suppliers; this results in a win-win situation for both the sides. Cultivating and developing solid, long-lasting relationship with suppliers is crucial, especially for helping professionals to meet costs, achieve quality objectives and speedy access to the market.

Improve skills continuously

Purchase managers and professionals always look forward to maximize their strategic sourcing acumen by improving their knowledge. This can be done by pursuing various online courses that are conducted by leading industry players. One factor that needs to be remembered is that strategic sourcing is a continuous and never-ending process, and in order to excel, one needs constant development of skills and knowledge. Hence, to become proficient, the professionals need to update their knowledge. This helps in understanding, planning and implementing a sound and effective sourcing strategy. This, in turn, ensures effectiveness, and lends an element of efficiency to the sourcing strategy for creating realistic opportunities for improving the corporate image of a business; enhances its market share and sales, and most importantly reduces costs.

Understanding and accepting the possibilities

Implementing sourcing and an effective purchasing management ask for a wide range of skills and knowledge. Here is a quick look at the competencies that are required for excelling in the field of strategic sourcing and decision-making.

  • Describing, distinguishing and accessing the key issues of opportunities, principles, strategies, development and its techniques that are pursued or followed by a business to gain a competitive edge
  • Defining as well as describing the issues pertaining to global sourcing, negotiations, business ethics and the likes
  • Identifying as well as applying decision-making frameworks along with problem-solving skills for determining of the best course of action related to the already discussed strategy areas.

Now that you know about the aspects of sourcing and purchasing management, you can handle its procedures with utmost efficiency.