SECTION 4.1 - SOURCING MANAGEMENT
Ultimately, procurement’s main objective is to source the right quantity of third-party products and services at the right time, the right price, the right quality and from the right supplier. While our Procurement Building Blocks indicate that procurement is a lot more than just sourcing, it is true to say that this is the core role of procurement professionals. Buying Management represents the operational view of procurement, which facilitates the process from identification of business needs, throughout the sourcing and contracting cycles and finally payment to the suppliers. Sourcing Management (or strategic sourcing) is procuring products and services for the organisation in a way that improves its operational efficiency and effectiveness, provides optimum value for money, and minimises risk.
Almost all of the organisations in our survey (96.7%) have a standard sourcing process that is used for procuring products and services.
Figure 43: DO YOU HAVE A STANDARD PROCESS WHICH IS USED FOR PROCURING ALL THIRD-PARTY PRODUCTS AND SERVICES IN YOUR ORGANISATION?
Yes No
96.7%
2.2%
Don’t know
1.1%
0
10%
20% 30% 40% 50%
60%
70%
80%
90%
100%
The challenge is to ensure that this sourcing process is consistently adopted across the organisation. In large organisations, or ones with weak governance structures, it can be especially difficult to mandate and monitor compliance in the application of a standard sourcing process. Sourcing process A sourcing process consists of a number of steps, typically starting from identifying the business requirements to selecting the right supplier and negotiating a contract. Sourcing processes may include five, six, seven or more steps. It does not matter how many steps a sourcing process consists of, but there are certain activities that should occur during a sourcing project in order to deliver benefits.
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