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What is Strategic Sourcing?

TAGS: Automation, fintech, Procurement
what is strategic sourcing

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What is Strategic Sourcing?

 

Let’s get one thing straight: there is a clear difference between merely purchasing products and strategically sourcing products. Contrary to popular belief, “Strategic Sourcing” is not simply when companies search for products at the lowest price; rather, strategic sourcing is when companies search for products at the lowest total cost—keeping in mind product price, quality, value, product shipment, overall savings, and product reliability. 

 

The only way to build a resilient supply chain is to be strategic in how your company adjusts to market shifts and rises to the occasion—in the face of adversity. Strategic sourcing optimizes the online purchasing process for companies by allowing them to assess what their specific product needs are and enabling them to source the most cost-effective and high-quality products.

 

Why is Strategic Sourcing important?

 

Strategic sourcing ensures that your company is buying the highest quality products for the lowest total cost while promoting long-lasting vendor relationships. Healthy relationships with suppliers are fostered by entrusting them to deliver quality products that consistently meet company standards. This dependable and steady relationship creates synergy between the two businesses and inevitably encourages growth. Your business is only as efficient as its supply chain; with strategic sourcing, your company is able to reap the benefits of total cost savings, improved vendor relationships, and supply chain resilience—aligning every purchase with long-term business objectives.

 

Essentially, companies looking to implement strategic sourcing have to ask themselves: 

 

How can I get high-quality products at a lower cost?

Who are the overall best product suppliers for my business?

How do I maintain a good relationship with my suppliers?

How can I make my supply chain more resilient?

 

The answer to these questions? Strategic Sourcing; it’s the process that constantly reviews, revises, and reinforces a company’s entire purchasing process.

 

How can Strategic Sourcing help my company succeed?

 

Here are 3 ways Strategic Sourcing significantly impacts your company:

 

  1. Increases Cost Savings—Strategic Sourcing is the act of comparing supplier prices against the quality of their product—saving companies the hassle of price-hunting while providing them with superior products.
  2. Builds Supply-Chain Resilience—Be proactive, not reactive. If 2020 taught us anything, it’s that it never hurts to be overprepared. Strategic Sourcing optimizes your vendor network by pre-vetting and approving suppliers based upon their own financial stability, ability to fulfill orders, and corporate responsibility; this reduces your companies risk of backorders and allows you to have confidence in your vendors.
  3. Fosters Supplier Relationships—You rely on your suppliers just as much as they rely on you. Building well-established, long-term relationships with your suppliers conveys to them that they are an integral part of your business; professional respect and loyalty are often reciprocated. 

 

Lowered costs, quality products, minimized risk, and long-term vendor relationships are just a few of the many advantages of implementing strategic sourcing into your company’s purchasing process. Strategic sourcing, on many levels, creates high value at a low cost.  

 

How has Negotiatus’ Strategic Sourcing saved companies money?

 

Negotiatus’ offers companies a $4 Billion+ buying power and a network of 4,000+ approved vendors and product suppliers—giving clients access to exclusive product offers, cost savings, and quality vendors. On average, clients also realize an 8% savings on all product purchases, with top performers saving as much as 16% annually.

 

MediaPlanet, a global marketing agency, struggled with streamlining their purchasing process. Tim Rossi, Financial Controller at MediaPlanet, states that MediaPlanet used to struggle with juggling “so many online vendors…[that made] budgeting and other processes difficult”—emphasizing that they “needed something more scalable.” After implementing Negotiatus and utilizing strategic sourcing, Rossi praises the simplicity of linking vendor accounts to one, centralized platform. Not only did Negotiatus save MediaPlanet time by allowing them to order from one catalog, but Rossi and his team have since realized an 8.8% savings on all products as a result of Negotiatus’ price-comparison sourcing capabilities. Rossi adds, “It’s amazing that we save time not having to compare prices, and have still realized considerable savings on the products we buy every day.” 

 

What Negotiatus offers:

 

Negotiatus’ Strategic Sourcing offers companies the best prices on quality products.

 

Negotiatus gives companies confidence in their purchases, saves them money, and encourages strong relationships with vendors. Our network of over 4,000 vendors allows for companies to find the high quality products they need—at the lowest available cost. Strategic sourcing fosters a resilient supply chain and clears the path directed towards your company’s long-term goals. 

You know where that path can lead; Negotiatus can help you get there. 

 

Let’s kickstart your strategic sourcing journey—schedule a demo with Negotiatus today!

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