In first world countries, credit ratings are transparent, allowing enterprises access to overdrafts, extended credit limits and payment terms or various forms of finance from financial institutions. In developing countries, this is not necessarily the case.
Developing a costing framework that is transparent and works across the global sourcing organisation to capture total cost of ownership is key to enabling supplier price benchmarking, mitigating margin risk across the supply chain and delivering profitable sourcing.
Building and improving a reliable supplier matrix that supports business and category objectives is a critical tool in driving a sustainable sourcing strategy.
For businesses to achieve strategic sourcing objectives there needs to be a clear and concise strategy that is agile, sustainable and lean that will maximise category value and margin, limits global supply risk safeguarding product demand objectives, and meet social compliance, environmental and product quality goals.
Delivering strategic sourcing improvement doesn’t just come from finding new suppliers, it starts internally with understanding the business strategy and direction, market intelligence on competitors, customer direction and historical analytics.
There are three different platforms to sourcing products. Buying organisations need to define what their business model is and how their process operates, never expect the supplier will understand your business model and process.