Key Stages of Strategic Global Sourcing
Companies across the world strive to offer quality products and services to their clients and at the same time, earn considerable amount of profits. International purchasing is a unique procurement strategy offering you the facility to procure quality goods at reasonable rates from developed and developing economies. You can hire a global sourcing agency to ensure a smooth and profitable outcome of your international purchasing endeavor.
Pls read the following steps to get an idea about the global sourcing process.
This is the primary stage where the sourcing agents identify the primary and the secondary operational activities, analyze market needs and identify competitors in the field. The insight gained will assist in knowing the prospective market and the objective of the brand in procuring from a different country. In this step, the sourcing specialist creates a baseline and work strategy for performance measurement.
2. Evaluate supplier and market
This is the phase where the agents create an elaborate benchmark to select suppliers. Depending upon the findings from the market evaluation, the agents can help you to create a final cost model. This is when the economic as well as the operational advantages are considered and calculated
3. Supplier Selection
The sourcing agent will assist you in selecting the suppliers, so that you can negotiate the price of the products to be procured from them. In this stage, the agents conduct a technical assessment of the suppliers who have been finalized. This helps in understanding the tentative savings of each and every supplier, so that you can decide which supplier to choose. The supplier with maximum savings is a good option as you can be rest assured of service, even if the economy faces a financial crisis. After this, an implementation schedule is drafted, which draws the timeline for various suppliers. This is the stage in global sourcing where you can finalize on the supplier you are going to choose for your procurement needs.
In this stage, a schedule for performance analysis is created where the sourcing agent outlines all activities performed as per the implementation schedule. The procurement agents constitute the implementation team and they publish the strategy as well as the schedule. This is when the supplier and the business owner - the latter with help from the sourcing agents - reach an agreement, which is related to resources, shared supply and logistical arrangements. If you expect any external and internal reports from suppliers, make sure to document it for later use. You never know when you might need them. You can also measure and report the actual performance of the suppliers regularly, with the help of the sourcing agent.
5. Keep an eye on performance
You can measure the performance of suppliers in response to the procedures and resources that are applied by supply partners. Independent measuring is also possible. This performance measurement should be routinely carried out and documented on a regular basis. This is the stage where you can analyze the efficiency of the partnership developed with each supplier. You need to identify the developmental areas and try to get rid of the problems faced. This approach results in improving the overall performance of suppliers.
6. Get an insight into the spend category
In this stage, the sourcing agents try to get an idea about spend category. This refers to the knowledge gained about the usage style, and why the specific grades were mentioned. You must also know about the different stakeholders involved in the procurement process. Starting from shipping details to handling, you need to understand the following areas.
a. Expense as per sub-commodity and commodity
b. Expense as per supplier
c. Total historic expense
d. Projection of future budget and demand
e. Expense as per department
7. Stay in touch with new suppliers
Any change in delivery process, specifications and pricing model is communicated to suppliers and people in your organization. Building a proper communication plan is essential to ensure a smooth transition from old to new.
Now, that you know about the various steps involved in the process of strategic procurement, it’s time you hire a sourcing agency for smooth procurement.