Strategic Sourcing provides organizations with a number of benefits, especially if they implement a strategic procurement software. It enables organizations to leverage its consolidated purchasing power to find the best value. By bringing a strategic approach to purchasing activities, procurement leaders can ensure that they purchase goods at the best total cost of ownership. The most important benefits of strategic sourcing are:
- Cost reduction: By choosing the right supplier that offers maximum value, the overall cost of procurement of the organization will be reduced, products can be priced competitively and profits can be increased.
- Better supplier relationships: Enhanced communication with suppliers in strategic procurement helps form long and sustainable relationships with the suppliers of the organisation.
- Risk Management: Strategic procurement considers elements beyond the cost of materials. It analyses supplier markets, supplier flexibility and innovation, to mitigate potential risk factors.
- Stable Supply Chain: With good supplier relationships, the current and the future supply requirements of the organisation is taken care. There will not be a situation where the organisation faces a shortage of supply.
