Sourcing Initiative

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1、Project Team and the Internal Benchmark
The benchmark will set the foundation on which the sourcing initiative will be built and measured. Before the benchmark can be built, the project team must be assembled. The project executive should identify the best resources both inside and outside to work on the initiative.
2、Market Assessment
The next step in the strategic sourcing initiative is to carry out a Market Assessment. Importantly the sourcing team must look at a number of factors in determining the status of the marketplace.
3、Collect Supplier Information
Collect information. Look to qualify as many suppliers as possible. Limiting the potential supplier base can only limit the opportunity for a successful initiative. That’s not wise. The larger the potential supplier base, the greater the chance to identify innovative opportunity and increased value.
4、Develop Sourcing Strategy
The sourcing strategy should be developed and approached as a fluid, evolving process. Fine tuning of the sourcing strategy will be required as the team interacts with the potential supplier base through implementation and measuring results. Take note, however, that as market conditions fluctuate, or the goals of the organization change, the sourcing strategy may need to be revisited. A common mistake of strategic sourcing initiatives is to get stuck on the initial process and strategy regardless of a complex or moving market. Always be prepared to revisit the strategy and reincorporate ideas that may have been overlooked in a prior strategy.
5、Solicit and Evaluate Bids
It is time to conduct the RFX (RFI, RFP, RFQ, etc.) process. The RFX document should be supplier-friendly. A straightforward and uncomplicated document will encourage suppliers to participate and allow them to present their most competitive offer. Keep the RFX open-ended. This gives suppliers the freedom to present more creative solutions and introduce more fresh ideas into the process.
6、Negotiate With and Select Suppliers
Negotiations with suppliers will begin following the initial bid process. Many sourcing professionals see the negotiation as an emotion filled battle with the supplier. In most negotiations, the best approach is to reduce or altogether remove emotion from the negotiation, and instead rely on a fact-based objective market picture for leverage with suppliers.
7、Implement Recommendations
The last step is to implement the recommended plan of action with the suppliers. The key to successfully rolling out the results of the initiative is to exercise change management control.