4.4

Sourcing and Supplier Strategy

The primary objectives of Sourcing and Supplier Strategy are high satisfaction and increased productivity experienced by end users, in addition to low total cost of ownership. To succeed in attaining these goals, Sourcing must achieve, maintain and utilize a strong negotiating position towards the supplier(s). Disciplined Sourcing and Supplier Strategy helps reduce supplier dependency.

SSM_Primary_Objective_of_Sourcing

Figure 4.4.1 The primary objectives of Sourcing.

 

Multi-sourcing is one of the possible strategies. Multi-sourcing refers to the creation of a manageable group of suppliers and/or internal providers that can provide all the required services, and that may be substituted for one another if necessary.

Sourcing is responsible for setting and following the selection criteria for suppliers. To manage risk, a company should choose reliable and solvent suppliers and join ecosystems that are able to deliver services, systems and products with solid business continuity. In addition to monitoring financial and operational stability, Sourcing needs to ensure that supplier organizations follow other relevant company policies such as those related to corporate responsibility.

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