The role of Sourcing in efficient purchasing management

[shukla7789]

Purchasing and its role in companies cannot be overlooked. This is the area where contracts with suppliers are managed, where stock levels are monitored and the strategy for the purchasing cycle is decided. To ensure excellence in all processes, companies have invested in sourcing techniques.

With the focus on a more strategic vision of the production process, the purchasing department has gained new relevance within companies. It has stopped acting in reaction to the lack of raw materials and has started to play a role of greater planning and rationality in supply.

In this way, the purchasing system became more complex with the integration of a greater number of steps, resulting in what is now known as Sourcing .

What is Sourcing?
Integrated into the purchasing department's iran whatsapp number database strategy , Sourcing is a term that represents a set of processes and good practices that allow finding the best suppliers for products and services.

In other words, this method does not focus on purchasing products, but rather on establishing a relationship with suppliers to create a supply chain with value.

To this end, unlike the traditional purchasing method, the focus is not only on price, but also on the quality of the service provided and the products supplied.

Sourcing is therefore responsible for establishing a relationship with suppliers, through the search, verification and evaluation of each of the business partners.

How is Sourcing carried out in companies?
With digital transformation, companies today produce a large amount of data that can be used to optimize internal processes.

In the Sourcing process, data from the organization's purchases and consumption are used to optimize the organization's entire supply chain and the relationship with suppliers .

The implementation of this method begins with the analysis of the supply history, both in terms of volume and value, to understand the organization's purchasing needs.

Then, suppliers capable of responding to the identified products and services are selected and conditions are negotiated.

Throughout the supply process, performance evaluation metrics are also defined to monitor the quality of service and focus on continuous improvement of the entire supply process.

The entire Sourcing process can be summarized in 8 steps:

Analysis of products consumed, spending patterns and the processes and departments involved
Sourcing strategy development based on company objectives
Market analysis and identification of various suppliers
Defining criteria and needs for negotiation
Negotiation with selected suppliers
Integration of new suppliers into internal purchasing processes
Analysis of service quality through performance metrics
Analysis of information for continuous improvement of the entire process
What are the benefits of Sourcing in purchasing management?
With the evolution of competitiveness and market demands, it is important that companies optimize their processes as much as possible in order to offer their customers the best cost combined with the best quality of service and product.

Cost optimization
Responsible for a large portion of costs, optimizing the purchasing process emerges as one of the priorities to achieve better functioning of the entire product or service cycle.

In addition to the expected cost reduction resulting from more careful negotiation with suppliers, there are also other benefits that can be obtained from the Sourcing strategy.

Greater planning and organization
By taking advantage of the huge amount of data produced by the organization, it is possible to plan supplies, ensuring the advance purchase of raw materials so that there are never stock shortages or operational stoppages due to a lack of products.

By identifying multiple suppliers, it also becomes easier to respond to potential supply constraints or risks, reducing exposure to market adversities. This is also a way to find new solutions, which can result in production improvements.

Invest in technology to optimize the management of your purchases
Optimizing your company's purchasing management can be done quickly and easily by adopting the PRIMAVERA Manufacturing materials management module .