Procurement and strategic sourcing are two terms that are often used interchangeably, but they are not the same thing. Procurement is the process of acquiring goods or services from external sources, while strategic sourcing is a more comprehensive approach to procurement that involves the development and execution of a long-term sourcing strategy to achieve specific business goals.

Here are some key differences between procurement and strategic sourcing:

Focus: Procurement is typically focused on short-term cost savings and transactional activities such as supplier selection, price negotiation, and contract management. Strategic sourcing, on the other hand, takes a more holistic approach and looks at the entire supply chain, including supplier relationships, risk management, and long-term cost reduction strategies.

Scope: Procurement is often seen as a function within an organization, while strategic sourcing is a broader, cross-functional approach that involves multiple departments and stakeholders.

Process: Procurement is often seen as a reactive process that responds to immediate needs, while strategic sourcing is a proactive process that involves continuous analysis, planning, and optimization to achieve long-term goals.

Measurement: Procurement is often measured by cost savings and transactional metrics, such as purchase price variance and on-time delivery. Strategic sourcing, on the other hand, is measured by more strategic metrics, such as total cost of ownership, supplier performance, and supply chain risk.

In summary, procurement is a subset of strategic sourcing, and while they share some similarities, strategic sourcing is a more comprehensive and proactive approach that focuses on achieving long-term business goals rather than just short-term cost savings.

Why should you use a strategic sourcing company for your products purchase?

Using a strategic sourcing company for your products can offer several benefits, including:

Cost savings: A strategic sourcing company has the expertise and resources to identify cost-saving opportunities for your products. They can negotiate better pricing with suppliers, help you identify alternate sourcing options, and analyze your supply chain to reduce costs.

Improved supplier relationships: A strategic sourcing company can help you build stronger relationships with your suppliers. They can manage communication and contracts, ensure suppliers meet your quality standards, and hold them accountable for meeting delivery timelines.

Risk management: A strategic sourcing company can help you mitigate risks in your supply chain. They can identify potential disruptions, develop contingency plans, and monitor supplier performance to ensure compliance with regulations and standards.

Increased efficiency: A strategic sourcing company can streamline your procurement process by managing the entire process from sourcing to delivery. This can save you time and resources, allowing you to focus on your core business activities.

Access to expertise: A strategic sourcing company has a team of experts who can provide guidance and advice on sourcing strategies, market trends, and supplier selection. This can help you make informed decisions and stay ahead of the competition.

Overall, using a strategic sourcing company can help you reduce costs, mitigate risks, and improve efficiency, allowing you to focus on your core business activities and grow your business.