Strategic Sourcing & Category Management
STRATEGIC SOURCING
Strategic Sourcing is smart purchasing. It's purchasing with organizational goals and mission in mind. Strategic sourcing considers both immediate needs and the long-term view. Strategic sourcing is a way to maximize value while minimizing cost. It can be defined as a collaborative team-based approach that aligns sourcing goals with the organization’s mission and vision while leveraging targeted expenditures with the best vendors to maximize value. It starts at the center of the organization but reaches out to all corners. The goal is usually to reduce costs, improve quality and convenience, and optimize inventory while improving lead time and rightsizing the supply base.
Overview
Strategic Sourcing has three (3) basic components: category planning, sourcing projects, and supplier performance measurement. Each is a team activity that requires collaboration between purchasing and other stakeholders. This document explains the basic tasks and provides templates outlining the information needed to complete them.
CATEGORY PLANNING
Category Planning starts with defining the scope of the 'category' and delineating any segments and sub-segments within it. A category is defined for our purposes as 'a family of products or services that share similar attributes or similar functions'. The spend analysis process groups purchases of goods and services together into category families that can be leveraged for maximum utility. The second part of the scope definition examines not only what is bought but also where the category and sub-categories are used within the organization. This allows the organization to identify key stakeholders for each category. Categories used by only a single sector of the organization may be handled differently from those used across geographical and departmental boundaries.
Calyptus has completed over 500 strategic sourcing projects on behalf of clients and has worked with over 20 private and public sector clients to develop category plans covering over 80% of their spend. We have had stand spend analysis projects, completed directed procurements on behalf of clients, and then trained the organization on the process and methods for implementation.