Think you are currently getting goods at a great price, but that is still not enough for your company targets? What if you could keep the low price for the goods you procure and achieve additional quick bottom-line savings?  That is exactly what Strategic Sourcing can do for you.  

Strategic Sourcing is about finding the lowest total cost of ownership rather than just focusing on achieving the lowest piece price for goods your company purchases.  Some of the factors that play into the total cost of ownership include

1. Quality
2. Logistics (Location)
3. On time Delivery
4. Technology
5. Engineering Support
6. Service
7. Tariffs
8. Cost
9. Supplier Contracts and Alliances

Purchasing a part from the supplier with the lowest cost may seem like a great idea but if there is a failure, quality issues, or a missed delivery, the resulting costs can far exceed the savings achieved in a year by going with a cheap supplier.  

By changing the way your organization thinks about sourcing, you can be able to achieve bottom-line savings with top quality suppliers in the marketplace.  This will result in higher quality products to your customers, new technology, and an edge over all of your competitors. 

In Strategic Sourcing, one also looks at suppliers as partners in business rather than a transactional relationship.  By coming to existing or potential new suppliers and notifying them about a partnership approach both companies can win and flourish.  During times of constrained supply or force majeure it will allow your company to keep up with deliveries and continue to supply your end customers.  As the relationship continues to develop over the years cost will continue to remain consistent and with regular meetings and transparent pricing this can be checked throughout the relationship.  Transactional relationships are great while times are good and may result in short-term savings, but as the business environment changes, this can result in your company being left behind by your competitors and stuck trying to catch-up.

Partnerships include:

1. Transparent Price Models
2. Priority for Supply
3. Transparent Forecasting and Planning
4. Sharing of Technology and design
5. Solving Problems Together
6. Awareness of the ups and downs of business cycles
7. Helping each other out in times of uncertainty

Is your company currently focused on transactional sourcing but interested in learning more about Strategic Sourcing and shifting your approach to supply?  Contact Hudson West (info@hudsonwestgroup.com) to have a free evaluation and learn more about how Hudson West can help you achieve increased bottom-line profitability and set you up for success for years to come.