Strategic Sourcing - Elevating the Role of Procurement to Trusted Adviser


Today’s global trade environment has never been more complex, making transportation and distribution sourcing more challenging than ever before. With transportation rates sky-rocketing, capacities shrinking, and the increasing complexities of carrier contracts, now is a great time to look at your sourcing strategy to ensure that you are doing all you can to contain costs, increase efficiencies, and mitigate risk.

Where do you start?

Strive to Improve

Any change in process should be initiated by the motivation to improve. In the case of logistics procurement, these improvements may involve gaining more control and insight over suppliers, improving delivery, and cutting overall spend.

According to a recent Key Issues Study by the Hackett Group, it was noted that one of the highest priorities for procurement is to “elevate the role of procurement to a trusted advisor status”.

By elevating your sourcing strategy, you can begin taking your department from a supportive business role to a strategic function. It starts by taking a more holistic approach to sourcing activities in order to:

  • improve processes and performance through innovation and technology; and
  • balance risk against service and price.

Strategic Sourcing—Your Primary Tool for Creating Value

Access to mission-critical data, particularly as it relates to managing complex sourcing events presents a big opportunity for CPOs to demonstrate true value. According to the Hackett Group Study, trends with the greatest transformational impact on procurement over the next decade include predictive analytics and cloud computing.

Strategic sourcing tools support these trends with the ability to develop sourcing scenarios, rate vendors, and manage bidding and contracts in real-time so that procurement can collect and evaluate meaningful data points in order to better meet demands across all levels of the supply chain.

What to Look For

Choose a Strategic Sourcing Option that…

  1. Knows Transportation/Distribution. There are lots of strategic sourcing options available. Make sure you choose a provider that understands the transportation and distribution business. Best-in-class solutions are going to include customization features that allow you to establish KPIs and targets for you to set goals and map out a return on investment.
  2. Flexes With Your Needs. When choosing a strategic sourcing option, it is important to ensure that it can handle the size and scale of your sourcing events, provide necessary scenario and analysis capabilities, and transparency across the enterprise so that risk is mitigated and costs are contained.
  3. Builds Supplier Relationships. Having a solid contract and supplier relationship framework is critical to assessing service and price against risk. A good strategic sourcing solution provides the data and information you need to better match suppliers with specific needs and facilitate communication with suppliers to build and sustain high-value relationships.

Final Words

Technology is only as good as the people and processes an organization has in place to support it. Start with an analysis of the processes that need improvement and then select a sourcing solution that best meets your needs. Select a strategic sourcing provider that understands your business, needs, and challenges. With the right solution, you’ll be equipped to take your logistics procurement from supportive to strategic.

Click here to view our latest Infographic on the role of Strategic Sourcing in Logistics Procurement.

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