The Strategic Sourcing Process
A seven-step sourcing approach from category understanding to supplier management and value capture.
By SupplyChain.management · Last updated
Definition
Strategic sourcing is a structured process for understanding a spend category, testing the market and awarding business in a way that maximises total value rather than lowest price.
Why it matters
Sourcing decisions lock in cost, risk and service for years. A structured process is what separates savings that stick from savings that vanish.
Example
A packaging category of 8M spend is segmented, taken to market with five qualified suppliers, and awarded across two suppliers with indexed pricing and a service SLA.
How to interpret it
Success is measured in realised cost, quality and continuity, not in negotiated paper savings.
How to improve it
Build category profiles, define requirements before the market test, evaluate on total cost of ownership, and hand over to a named supplier manager after award.
Common mistakes
Treating sourcing as an event that ends at contract signature.