Strategic sourcing is a disciplined process for analyzing demand and supply markets, defining requirements, identifying and evaluating suppliers, negotiating, selecting an award approach, and governing implementation. It connects commercial value with risk, quality, service, capacity, innovation, and stakeholder priorities. It is more than issuing bids and should align with the category strategy.
In plain English
It is the evidence-led way to choose and establish the right supply arrangement.
Illustrative example
At Northstar Industrial Systems, the team analyzes plant demand, market capacity, technical requirements, risk, and total cost before running a multi-stage sourcing event.
- Related terms
- Category strategy; RFx; Supplier evaluation; Award scenario
- Lifecycle stages
- Strategy; Source; Award
- Stakeholders
- Procurement; Operations; Finance; Supplier