The economy is global. Doing business in the global economy is competitive, complex, and sometimes chaotic.
Product and materials sourcing is a constant struggle. Your carefully constructed supply chain is under duress. Political volatility, the forces of nature, and emerging threats can disrupt it.
Is your sourcing system stable enough to hold up to today’s risks? Can your supply chain weather the storm?
Effective strategic sourcing can give your company the edge over your competition. Here’s how using it to build reliable sources helps your business hold up to the chaos.
What Is Strategic Sourcing?
From raw materials to stocking shelves, the supply chain is how we move products to market. It is a decidedly linear model.
Strategic sourcing loops that model back on itself. It requires you to consider not only your company’s needs and objectives but those of your suppliers as well. This changes the logistics of supply chain management.
You need the best materials at the lowest cost from the most reliable suppliers. Effective sourcing is more than just achieving the lowest possible cost. Focusing on cost alone is short-sighted and risky.
Strategic sourcing creates a long-term, enduring sourcing model because of its holistic approach. The goal isn’t just to find the cheapest source. The goal is to find the supplier who can deliver the highest value at the right price.
Increasing Efficiency While Reducing Costs
Strategic sourcing is a more comprehensive, researched, and planned approach to procurement. The process saves money by ensuring you have the most effective relationships with the right suppliers.
Strategic sourcing uses spend analysis, supplier evaluations, and relationship management assessments. It combines that data with detailed market research. This allows you to gauge the effectiveness of your sourcing strategy and relationships.
Incorporating EDI into the process improves cost savings. EDI solution streamlines the way you communicate with your suppliers. EDI’s fast, agile, paperless communications add to the efficiency.
Competitive Differentiation Opportunities
Strategic sourcing requires you to build partnerships with your suppliers. These mutually beneficial relationships create new opportunities. They give you new ways to differentiate your company from the competition.
You want to work with suppliers who provide the very best ingredient, parts, or materials. You can use their reputation to promote your product or services. One of the best examples of this is Post Raisin Bran. They proclaim cereal is “made with hundreds of juicy Sun-Maid raisins” on each box.
There are other examples too. Consider Eight O’Clock Coffee’s 100% Columbian beans. There are Dodge’s Hemi engines and McDonald’s Oreo McFlurry. It happens every time a restaurant displays a “Drink Coca-Cola” sign.
The Role of EDI in Strategic Sourcing
Strategic sourcing is an effective model, but it only works with efficient implementation. EDI solutions allow you to nurture important two-way relationships with your suppliers while saving you time and money.
EDI sourcing is agile, scalable, and cost-effective. Plus, EDI management can be handled on-site or by remote workers and scaled to fit your company.
Moving Forward With Strategic Sourcing
The global marketplace continues to expand. Strategic sourcing can give your company the edge it needs to keep up with the challenges.
Utilizing EDI solutions to manage your sourcing and other supply chain functions helps you keep pace. EDI offers cost-effective, real-time functionality. That lets you focus on your sourcing strategy and building durable relationships with suppliers.
At Data Communication Solutions, we understand your business’s strategic sourcing challenges. We offer a broad range of EDI solutions to help you meet those challenges.
Get a free, no-obligation assessment to find the right EDI solution for your company.