• November 24, 2018

The Past, Present and Future of Strategic Sourcing

  • By admin

Chess Pawns

As the global economy has emerged, supply chain management and source procurement have gotten much more complex. What was once a simple process involving local vendors and producers is now global, involving dozens of sources of materials, manufactured goods, packaging, etc. Helping that is the sourcing software solution and here is its legacy.

Direct Material Procurement

It used to be that sourcing was done manually through relationships that were cultivated over years, sometimes generations. Now, sourcing software allows for the management of multiple sources, often for the same materials or product. Sourcing software was once nothing more than a spreadsheet with a lot of entries. Now, it is a series of very complex databases that work together to get the optimum pricing, transportation, quality, delivery speed, distribution, etc.

Technology-Driven is the Present

Sourcing software suppliers today are less focused on providing a source manager than with a system that allows for sourcing strategy. By having all the sourcing data on one platform, everything is negotiable, based on the needs of the buyer. So if a supplier in Singapore is experiencing delivery issues because of bad weather, another in Beijing might be a better option. If the pricing on raw materials is too high in Canada, the buyer knows instantly if there’s a less expensive alternative in Mexico or overseas. That’s only possible via powerful databases and database management tools that bring sourcing to fingertips.

The Future is Options

Strategic sourcing is based on the concept of options management: Find the most for the least, without sacrificing quality. That’s not going to change anytime soon. What’ll change is the availability of resources. As countries develop, new suppliers become available, making strategic sourcing more complex but also more powerful.

A clothier in Washington, DC, for example, will be able to source materials from all over the world and bring them together at a warehouse in San Francisco for shipment to a manufacturing plant in Ohio. From there, it’ll be delivered to DC ready to be used in clothing design. Those steps will only present more options as strategic sourcing grows.

Sourcing has gone from handshakes and promised deliveries to contracts being granted on the spot and sources from all over the world being managed by a single sourcing software solution. If you’d like to learn more, contact us at cbxsoftware.com.

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