Sourcing Strategy (Article Critique Sample)

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Sourcing Strategy
Summary
Sourcing strategy is equated to a chess game that decision makers play before embarking to the market to buy materials, parts, ingredients, equipments products and services. This entails this understanding the supplier’s potential and deciding the best way to access the market in order to maximize organization value. Searching for quality goods and services at a low cost is an objective of every firm. This is mainly because of the ever changing consumer preference and taste demanding for high quality goods at all times. Identifying therefore suitable strategic sourcing policies can help in equalizing market forces such as stiff competition.
No matter the number of steps in the sourcing process of a company, every organization seeks to achieve three things. First is understanding the analysis of suppliers, competitors, markets, capabilities, industries and needs. This involves deciding to go to a particular market which is often misunderstood with strategy determination. Tools to use in getting into a market include online negotiation, request for proposals (RFPs), face-to-face interaction and auctions. This can sometimes be tough to handle in an environment where rules, targets, customer expectations and scoring systems are constantly changing. Performances measurements, relationship management, supply chain response and change management tasks which are complex are the key areas to evaluate value. Technology can be used to understand, and manage some of these processes for better chances of success.
After gathering and analyzing internal data (specifications, resources, requirements, technical capabilities etc), an external environment scan should be done. This is an easy process with the use of the internet. Many companies nowadays use search engines to check websites, supplying capabilities, catalogs and general information e.g customer ratings, reputation and financing capabilities. It is however important to take caution because information in the internet can be rumors, personal views and non-factual. Market services subscription requires experience and the skill of market savvy. This process involves the use of technology is analyzing huge amounts of data gotten from the internet. Every sector has its own distinct market services, some cutting across many markets. Market services subscription enhances both the formulation of strategies and monitoring of strategic outcome in dynamic markets.
The most important thing in market services subscription is understanding what to do with them to better ones performance. With the understanding of a market one is able to develop effective strategies that are able to deal with turbulent events. Forecasting the supply and demand balance and choosing suitable costs sourced from the market will help in strategic sourcing. External environmental scan involves analyzing individual suppliers and supplier industries. This entails evaluating suppliers who could be strategic to the firm offering mutual benefit. It is vital to encourage a warm relationship between a firm and its suppliers by personally interacting with them. The face-to-face interaction also assists in monitoring the suppliers’ corporate situation. Companies continually change due to various reasons, It is therefore important to keep track of all the changes in the industry to provide better analysis of the best steps to take.
Critique
Having the ability to understand suppliers, means that firms form a better relationship with their suppliers. However these processes of building a strong relationship might take time. This can be a great hindrance in business especially in industries that have stiff competition. However much positive impact an organization gets out of strategically sourcing, the process is resource consuming. This is not usually an activity that small and medium sized firms would want to undertake. It inv...