The procurement process is considered an intricate method. Strategic procurement is a process at a corporate level. Several functional areas and departments are expected to put their views and ideas for an organization to build up the strategic procurement procedure. Therefore, it is essential for strategic sourcing companies to build up a team which can effectively handle the strategic procurement procedure. Aligning with the business strategy, the procurement strategic team sets the entire path for procurement. The data produced by the implementation of strategic procurement process will be used by this specialized team to form a plan and then execute it at a whole new level.


In this context, you will learn about the seven vital steps that will lead to a flourishing procurement process.

  • The foremost thing that needs to be done is collection of the initial data from the organization. The purpose of collection is benchmark the current performance of various sectors of organization, to learn about the different resources used and how much is used in total, the total cost that is required for running all the departments or functions in the organization, and learn about the growth projections experienced by the organization. The procurement team, before setting up the procurement process, will monitor every small detail related to the organization’s cost and performance, identify the targets and needs and then develop the final procurement strategy. This involves the assemblage of different data related to the organization.


  • The second step you need to focus on as a strategic procurement team is to thoroughly check the overall supplier’s market. This is an important step where the team needs to go through the potential countries that can provide raw materials finishes services and goods, and components to the organization. Any country that is feasible for such raw materials is shortlisted by the team. Then the team will decide upon the specific requirement of the organization. Depending upon the requirements the team will limit the number of countries from the shortlisted ones. For example, if an organization requires a specific material which is available in only one country then the options become much narrower. And, for manufactured products, there will be a broad range of options for the team to select from. The procurement outsourcing company’s technological requirements might also limit the number of services.


  • This brings us to the very next step that is collection of the supplier’s information. An organization is recommended to select product suppliers carefully. If a supplier fails to meet the required criteria set by an organization’s procurement team, that will be a loss for the organization as well. The loss will be in terms of money and time. Therefore, it is advisable to the team to carefully assess the business reputation and evaluate the supplier’s performance accordingly. They are also recommended to monitor financial statements, references, and credit reports carefully before selecting the particular supplier. Another way to detect the performance of the supplier is to check the supplier’s site on the Internet and ask for reviews from customers who have previously worked with the supplier. This will assure the current organization’s procurement team about their decision. You can also hire agents who are familiar with the stakeholders and have knowledge about the current marketing strategy.Organizations are open to choose more than one supplier to avoid any potential disruption and form a competitive environment. This is mainly helpful for multinational companies


  • The strategic procurement team of procurement outsourcing companies can then develop an outsourcing strategy. This step can be formed only after gathering relevant information from the first three steps. The gathered information will help the team to create a unique strategy for the organization. If the team is able to select the correct strategy for the organization depending on the supplier’s market competitiveness and the outsourcing strategies, then that will be a great step for the organization. This will help in risk tolerance and build the entire business strategy for outsourcing products. Here are some of the examples of creating sourcing strategies:
  1. Strategic partnership- The team will select a particular supplier and then enter into an agreement with the supplier.
  2. Direct purchase- The team will send Request for Quote or Request for Proposal to the selected supplier.
  3. Acquisition- selecting a supplier and then buying from them


  • The strategic procurement team will now have to implement the sourcing strategy to the procure products. The strategies of sourcing that requires strategic partnerships and involve acquisition are vital undertakings. The suppliers will have the following characteristics:
  1. The suppliers will involve in activities important to the buyer that is the raw material for the buyer and access to another confidential knowledge.
  2. Portion of a wider business strategy
  3. One of the available suppliers with pool of skilled labor and specific technology


  • The very next step that the procurement team should do is select a winning id after negotiating with the suppliers. The team is required to evaluate various responses from the suppliers and apply the evaluation criteria. The suppliers who will be bidding might ask for some additional information so that they can put forward a realistic bid. The organization is expected to supply this information and allow the supplier to respond to the given information prior to making any decision. The procurement team will then assess the received bids and shortlist the bidders by using the selection criteria. After the final bidder has been selected, the procurement team will enter a contract negotiation.


  • The selection of the final bidder brings you to the last step which is implementation of the transition plan. The team needs to form a communication plan and a system for evaluating and measuring the performance.


The procurement team positively benefits from strategic sourcing in several fields, such as increased compliance, lowered cost, and optimized productivity. Strategic sourcing is also helping companies improve in data collection procedures and digital transformation processes across the industry. This is making strategic sourcing methods popular in the supply chain processes and revolutionizing procurement.


Undoubtedly companies can be hugely benefitted by implementing these strategic sourcing steps utilized by the strategic sourcing companies at a higher rate.

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