From Baby Boomers to Millennials: How Sourcing Has Changed
Today’s strategic sourcing discipline represents the culmination of methods that have developed over several decades. In the 1960s, competitive bidding seeking the lowest price with a focus on material management was the most common approach to sourcing. By the 80’s, with a greater number of suppliers in almost every market segment, the focus began to turn toward evaluating supplier reliability and quality. Strategic sourcing came into prominence in the late 90’s as procurement professionals began viewing suppliers as partners rather than simply suppliers. It became a process that continuously evaluates and enhances an organization’s purchasing activity, and that embraced supplier management and relationship-building, discarding the short-sighted attention to cost as the sole driver. Procurement officers of the baby boom generation adapted to these developments and, today, Millennials with their tech savviness, practical understanding and education have fully embraced this latest development.
Various definitions of strategic sourcing point to the enterprise-wide impact it has, both on the purchaser and the supplier—because organizations strive to achieve the best long-term value in a relationship.
- “A system and fact-based approach for optimizing an organization’s supply base and improving the overall value proposition.” (University of Michigan)
- “Strategic sourcing is the selection and management of suppliers with a focus on achieving the long term goals of a business.” (ISM Glossary of Key Supply Management Terms, fifth edition)
- “Strategic sourcing is the collaborative and structured process of critically analyzing an organization’s spending and using this information to make business decisions about acquiring commodities and services more effectively and efficiently.” (Office of Management and Budget)
eSourcing with FlexRFP™
In the simplest terms, strategic sourcing—often called “eSourcing”—uses the Internet to purchase materials, supplies and services, which saves you money, streamlines your business and makes you more efficient. Our product, FlexRFP™, gives you an efficient approach to eSourcing as well as supplier management. It also embodies one of the best practices in strategic sourcing that has saved companies millions of dollars and achieved a 30 percent or greater reduction in cost for many: reverse auctions.
A reverse auction asks suppliers to bid their lowest price on a contract you intend to award. Each supplier retains anonymity, but is able to see what others have bid on the reverse auction web page. Creating a reverse auction requires a good deal of preparation, however with FlexRFP™ you’re able to populate templates in a matter of minutes that present your contract terms, the product or service on which you want to receive bids, technical specifications, shipping and delivery terms and every important aspect of the contract—all in about five minutes. This makes posting to your web server almost trivial, no matter how complex your contract terms might be.
Another best practice in modern strategic sourcing is to simply put away the spreadsheets, Word documents, emails and random notes that harken back to last century practices when Purchasing Departments used stand-alone productivity software to handle sourcing. FlexRFP™ collects the data you need in an organized fashion, makes it accessible to those who need it, and saves time and money wasted when a company uses outdated software tools.
FlexRFP™ is easy to use and requires no training of your suppliers, while your buyers can be up and running in a day’s time. EC Sourcing Group is led by former Fortune 500 sourcing professionals who know the procurement challenges you face on a daily basis. FlexRFP™ is a mature and powerful tool that makes your job faster, easier, more accurate and lets you lead your company to new opportunities and earnings. Take a moment to review the results companies in nearly two dozen industries have achieved, and then contact us to schedule a demonstration.