In today’s world, supply chain operations are under increased pressure. Customers’ expectations are rising, regulations are becoming more stringent, and external factors like a global pandemic have enhanced the importance of effective supply chain planning. Adaptability, flexibility, and resilience are essential in today’s supply chain environment.

For procurement and supply chain processes to evolve and be innovative in the current challenging environment, digital transformation is essential. When companies can access accurate information quicker, they will have a significant competitive edge since they will be able to address issues as they occur rather than after reporting cycles.

The importance of strategic sourcing in a successful supply chain cannot be underestimated and can be a truly value-adding process when implemented in the right way.

What is Strategic Sourcing?

Strategic sourcing is a procurement process that involves the collection of data, spending analysis, market research, negotiations, and contracting. It is important for enterprises to align their purchasing strategy with their business goals in order to find the best price and value. With Anaplan, strategic sourcing can be optimized by formalizing the way information is collected and utilized so that they can use their purchasing power to find the best price.

In order to achieve strategic sourcing, an organization must analyze what it buys, from whom, at what price, and in what quantity. Unlike traditional purchasing, strategic sourcing optimizes the sourcing process by analyzing ongoing costs and relationships built with suppliers in an effort to reduce the total cost.

Businesses can improve their procurement processes with strategic sourcing by focusing on the future. Developing an adaptable sourcing system can contribute to long-term value for an organization. Following an analysis of business needs and historical spending, a strategic plan is created, and then the data collection and analysis is what guides supplier selection.

After selection and negotiation, strategic sourcing involves continuously monitoring and improving the process.

Strategic sourcing can be broken into several steps as follows:

• Analyze product data, spending patterns, and the processes and departments involved.
• Develop a strategy aligned by business goals.
• Analyze the current market and create a supplier portfolio.
• Negotiate with and select suppliers.
• Integrate suppliers into existing processes, onboarding any new vendors.
• Track performance metrics and optimize the sourcing plan, as needed.

Benefits of strategic sourcing with Anaplan

The most prominent advantage of strategic sourcing with Anaplan is finding hidden cost savings through optimizing supplier allocation. Through connected procurement planning you can accelerate objective decision-making by automatically selecting vendors based on cost, capacity, lead time, quality, and other factors.

According to Gartner’s Magic Quadrant for Strategic Sourcing Application Suites, the biggest reason for investing in a platform like Anaplan is to transform sourcing within the organization, at 74%. Businesses also reported increased productivity through automation (65%) and increased savings (61%) as top drivers for pursuing strategic sourcing.

In the long run, implementing strategic sourcing can facilitate strong relationships with suppliers, identify potential improvements and provide justification for changes to improve efficiency throughout supply chain processes.

Why Anaplan for Strategic Sourcing?

By having a single source of truth and providing clear views of your data, Anaplan gives your business unprecedented capabilities when analyzing the current situation, evaluating risk scenarios, and helping make more informed decisions. Your strategic sourcing plan can be managed with Anaplan to ensure quality and timely execution.

Anaplan allows you to track and monitor the flow of information between factories, regions, stores, and headquarters. Ensuring that sourcing is aligned with lead times and inventory plans. As opposed to the old methods, Anaplan offers real-time information and comprehensive views with end-user-friendly planning views that can be tailored to suit specific business needs.

By creating what-if scenarios, Anaplan makes it easy to manage risks by investigating different probabilities. All in one platform, the costs associated with sourcing decisions can be assessed and monitored to ensure that you make the most out of your supplier allocation strategy.