Mercinta: Corporate Strategic Sourcing - "Looking From Outside The Fishbowl"

Sydney, Nov 19, 2007 AEST (ABN Newswire) - The strategic sourcing value chain diversifies the growth portfolio of companies. Leadership thought is focused on the strategic procurement in a holistic way. Strategic sourcing is about making smart dollars, growing innovative solutions and reaching maturity in cost reduction.

Strategic business sourcing, a transformational business philosophy promising to better the cost position as well as the strategic market position of companies, goes beyond cost savings. The traditional sourcing methodologies are re-engineered to benefit businesses with constant outsourcing, contracting, purchasing and development needs. Sourcing is instrumental to a firm's value chain; at least it should because there is new methodology described as 'Business Procurement'. This idea is challenged by the origin of sourcing and driven by the need to apply holistic management models to deliver best value sourcing solutions to secure the future of your business.

According to *ENOVIA MatrixOne, 'the Maturity level of procurement and the ability to contribute to revenue growth, cost reduction and profitability is fundamental to drive business value.

Strategic business sourcing creates shareholder value, a competitive advantage when aligning business direction with a holistic sourcing approach and brings more revenue and savings under management. The conceptual shift to procure profits in form of aligns with the global trend to commercialize on niche markets.

Sourcing consultants agree on the basics that the sourcing process has to be aligned with overall business needs; why, because markets become more niche and business success is based on many variables. Business sourcing strategies are about developing methodologies which will enable growth potential which happens when sourcing strategies boost operational processes while putting a company in the driver seat.

The power of sourcing might be undervalued because it still is a buying discipline and seen as a necessity. Yet, many agree that when you want to generate more revenue you will have to sell more which becomes harder because the consumer is smarter as they've ever been. The conclusion, therefore, is to invest in procurement. Just how innovative procurement can be will remain the challenge of a few talented companies within the advisory industry. The shift from product sourcing to business sourcing is an evolution which betters the cost position as well as the growth position of companies in a global environment.

For Toyota to ensure diversity throughout its supply chain, the company has implemented an inventive Tier II Sourcing Program, helping companies like Millennium Steel Services L.L.C. (No. 28 on the BE INDUSTRIAL/SERVICE 100 list with $149.6 million in sales) become top Toyota suppliers. Alleyne, 2007

What buyers want are dizzying savings and superior quality services within their sourcing and supplier arrangements. However, the strategic value propositions need to translate cost into profit because procurement is about making smart dollars not just savings. Everybody can find suppliers and negotiate a deal but the essence of commercial buying is to develop business procurement strategies that fit your overall business direction.
Strategic sourcing processes have a very spiky performance curve of opportunity which requires an adaptive management style. Mega deals are pretty much history in procurement because supply bases get large and the customer gets standard services. This makes room for niche opportunities.

Strategic Sourcing has become a Strategic Business unit accelerating benefits and delivering tangible and intangible value across the company. The sourcing playground has become very sophisticated and the fundamental shift leading this trend is that there is a relationship between best-value procurement and business growth in many different ways because sourcing strategies do one thing very well and that is bettering a company's vertical market development and create value based sourcing.

Every company has a different business strategy so sourcing strategies need to be uniquely developed. From a procurement perspective; the greatest achievement is increasing strategic business value that companies can then pass on to their markets.

Ask yourself these questions:

1. Do I have the need to understand how sourcing creates a competitive advantage to better my business direction strategies?
2. Am I happy with my current outsourcing solutions?
3. Am I interested to develop innovative strategies to grow my business?

Source
Mercinta Business Procurement Services

To learn more about strategic business sourcing in your company call Timo at:
Telephone: +61-2-8249-4054
Internet: http://www.mercinta.com

About Mercinta

Mercinta Business Procurement Services is an Australian company devoted to corporate strategic sourcing, procurement and business development consulting. Mercinta delivers sourcing leadership enabling strategies to build a competitive sourcing advantage. Mercinta also innovated and launched the procurement innovation series to tackle the strategic sourcing problems of corporate Australia.

Sources

* ENOVIA MatrixOne, Strategic Sourcing for Total Cost Management: Turning Suppliers into Partners, 2005.

** Article Title: 40 Best Companies for Diversity: In Our Third Annual Survey, We Focus on Supplier Diversity and Senior Management Representation-How Much Companies Spend with Black Suppliers and Who They Let into the Corporate Suite. Contributors: Sonia Alleyne - author. Magazine Title: Black Enterprise. Volume: 37. Issue: 12. Publication Date: July 2007. Page Number: 106+. COPYRIGHT 2007 Earl G. Graves Publishing Co., Inc.; COPYRIGHT 2007 Gale Group