Strategic Sourcing

Strategic Sourcing

Steps

The transition from the traditional purchasing to strategic sourcing and supplier relationship management could take seven steps (Vitasek, 2016). The first step is defining the category and the commodities involved in the sourcing process. The step involves establishing the quantity used, types, and sizes of products involved in outsourcing. The following step is initiating the supply market analysis. In this regard, the manager analyzes the potential suppliers, locally and globally, and the risks that the suppliers are bound to face as well as the opportunities. Subsequently, the manager should develop a strategy that aims at minimizing the costs and risks related to the transition. The fourth step entails selecting the sourcing process to establish the product specifications, service and delivery needs, and the legal and financial stipulations that are associated with the entire process. The next step involves negotiating and selecting suppliers. The stage involves conducting multiple rounds of negotiations to agree on the best suppliers, and it requires a collective effort of a given team (Vitasek, 2016). The final step includes implementation and integration. The step entails notifying the prospective suppliers of the implementation process as communication is given priority in service delivery.

Competitive Advantage

After the implementation of the strategic sourcing initiative, the company will have multiple competitive advantages over other competitors in the industry. First, the company enjoys supply stability as opposed to the traditional approach that was in use. Strategic sourcing is essential in building a strong supply partnership (Gottfredson et al., 2005). That aspect comes with a guarantee of longevity and consistency in the supply chain, making the company stable as far as the supply chain is concerned. Further, the company does have a window of opportunity in negotiations leading to efficiency in cost management. The buyers can negotiate the costs of goods freely, especially when they are making high-volume purchases. Finally, the company has a competitive advantage when it comes to risk management. Through a close relationship with the suppliers, the company would be in an excellent position to identify potential threats and hurdles promptly and subsequently resolve them in a short period (Gottfredson et al., 2005).

The aspect is an essential factor in ensuring a continuous and smooth running of the organization.

Part B

Student 1

Hello Evan. I appreciate your discussion and the steps involved in initiating the transition process. It is good you have incorporated training as one of the essential techniques that are vital for the success of the whole process. However, I believe that the analysis of suppliers and taking into consideration a robust selection process would be equally essential. On the other hand, you could have elaborated how the sourcing process would lead to the reduction of overall costs concerning the relationship between the company and the suppliers. Think about flexibility in negotiating costs and so forth.

Student 2

Hello Jeannie. Though you have outlined the steps you will use as the manager in the sourcing process, it is vital to know that examining risks involved in the process and those that relate to the suppliers is pivotal for the success of an organization. You must incorporate the importance of communication throughout the entire process. However, you have not demonstrated how the sourcing process will lead to the company having a competitive advantage over others. Therefore, you can think in the line of cost reduction, efficiency in operations, and other aspects.

References

Gottfredson, M., Puryear, R., & Phillips, S. (2005). Strategic sourcing. Harvard business review, 83(2), 132-139.

Vitasek, K. (2016). Strategic sourcing business models. Strategic Outsourcing: An International Journal, 9(2), 126-138.