Strategic Supply Chain Sourcing and Procurement

Improve supply chain sourcing, procurement and supplier management operations.

Key activities for managing sourcing & procurement

Sourcing & procurement leaders are searching for ways to improve their departments and drive greater business impact. But competing priorities leave them wondering where to focus time and money. What sourcing & procurement activities matter most?

Don’t waste time on sourcing & procurement activities that won’t move the needle: Our sourcing & procurement activity map identifies the 29 essential activities for managing sourcing & procurement. 

Download the activity map to learn what leaders say are the key sourcing & procurement activities to building a world-class organization. 

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29 essential sourcing & procurement activities

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    New risks emerge with increased complexity, impact and velocity. Most leading organizations tackle this challenge with automated risk assessment and monitoring. Speed, accuracy and awareness are crucial.

    Koray Kose

    Senior Director Analyst, Gartner Research & Advisory

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    Supply chain risk poses great concern to most organizations. 89% of participants in a recent Gartner survey said they experienced a supplier risk event in the past five years.

    Supply chain sourcing and procurement insights you can use

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    Saved $600,000 in annual costs by leveraging supplier category intelligence
    Client Success Story

    Leveraging Supplier Category Intelligence to Reduce Costs

    With an impending contract renewal with their largest supplier, a medical device manufacturer was lacking a well-defined strategy to renegotiate terms intended to streamline costs. Gartner helped guide their negotiation strategy and recommended ways the client could leverage vendor category intelligence saving the client up to $600,000 in annual costs.

    Sourcing and procurement strategy questions Gartner can help answer

    As the name suggests, strategic sourcing in procurement is the strategic approach to finding the best and most effective procurement solutions for your business. 

    It encompasses data collection, budgetary spend analysis, product market research and manufacturing/supply chain contracting. The supply chain logistics manager executes the procurement process.

    The procurement cost-saving mindset limits the function’s ability to deliver extra business value. Factors that contribute to this include:

    • Businesses often seek to optimize total costs rather than cut unit prices.
    • Mature sourcing functions see supplier collaboration and sustainability as more important priorities than cost savings.
    • Procurement’s inability to add value to business objectives — beyond cost savings — is the main barrier to earlier involvement in new product development.

    Furthermore, most companies are not aware of supply-side risk events or disruptions until far too late in the process and they lack predefined response strategies. Having a supply-side risk prevention or mitigation strategy is key to overcoming any issues that arise in your supply chain from the supplier’s side. 

    The benefits of supplier collaboration are not being fully harnessed, either. Supply chain logistics strategists rarely have a fully engaged relationship with their suppliers, meaning that collaboration is often more labored and less transparent.

    If your organization lacks a strategic sourcing initiative or has one that is currently ineffective, you need to:

    • Evaluate the effectiveness of your current procurement function and assess how stakeholders view procurement’s performance and value contribution. 
    • Identify issues that stop suppliers from giving you their best service. For example, why is there a disconnect between the supplier and your logistics/supply chain department? 
    • Design the ideal sourcing strategy in a best-case-scenario situation. Then assess areas that can be modified to suit business and supply chain capabilities.
    • Create a balanced short-term and longer-term strategy for optimizing your strategic sourcing and supply chain services cost.
    • Build more functional and trusting relationships with your key suppliers to improve value.
    • Engage with innovative suppliers and develop “customer of choice” status with them.

    Actively aligning business and procurement strategies and enhancing business resilience will improve your opportunities for success in a changing business landscape.

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