Why Strategic Sourcing Is So Important For Your Business?

Why is strategic scouring so important for your business? Strategic sourcing from overseas can help your business grow.

With the current climate, more businesses are looking to optimise their costs, and having strategic scouring in place can help you achieve this.

In order to start this process, the company’s internal demand is analysed such as what materials are needed or what additional services are required.

This will also allow you to understand your position in your industry’s market.

Are you ready to start working on your Strategic Scouring plan?

Strategic sourcing = lower procurement costs?

Strategic sourcing isn’t about getting a better purchase price for your products.

Having a strategy allows you

  • Optimise results
  • Sustaining success
  • Building relationships with suppliers

In order to obtain the best conditions with suppliers, it is necessary to have knowledge of both the global and local markets.

However, where do you start?

Using a scouring company like ourselves, S3UK.

We will not only find the right supplier for you, but we also take the risk out of scouring as we have already built up those relationships with many overseas suppliers.

Benefits of strategic sourcing

There are multiple benefits to lowering your production costs.

  • Improved alignment between business objectives and sourcing processes
  • Discovery of the most suitable suppliers
  • Improved trust and communication with suppliers
  • Reduced purchasing risks
  • Improved commercial forecasting
  • Cost savings (direct and indirect)
  • Improved efficiency and opportunity for continuous improvement

In order to reap the benefits of strategic sourcing, it’s necessary to have a deep understanding of the whole process, this requires a great deal of experience and is very complex.

This can put many businesses off scouring from overseas, this is why it’s becoming more common for businesses to outsource this service to a scouring agent.

Here are the key steps of a strategic purchasing process and carrying out the strategic sourcing process step by step is fundamental to achieving successful results.

Establishing categories

Firstly expenses and needs should be analysed by category of product, which can be one or several.

It is necessary to be clear about the basic data:-

  • Quantity of products needed
  • Typology
  • Size

Analysing the market

Once it is clear what is needed, it is time to analyse the supplier market.

It is essential to know which manufacturers can offer you the product you are looking for, but also to evaluate their:-

  • Quality
  • Availability
  • Payment conditions

Supplier selection

Once you are clear about how to improve your purchasing process, it’s time to take the list of suppliers and filter those that meet all your requirements.

Negotiation with suppliers

During this stage, arrange meetings so that you can get to know your supplier/s and negotiate all the details of the future agreement.

When scouring from overseas there can be a language barrier which can lead to communication errors and even derail your agreement.

Monitoring and evaluation

The new sourcing process needs to be monitored and evaluated on a regular basis.

Using the right metrics (KPIs) will allow you to compare your new strategy with the previous one, to see if savings targets are being achieved.

As you have seen from all of the above, procurement is a complex process and may put you off from scouring overseas.

However, if your company is thinking about how to improve negotiation with suppliers, reduce risks and cut costs, let a specialist scouring agent like S3UK help you achieve your goals and increase your competitive advantage within the marketplace.