When starting the sourcing process, it’s essential that you first define what it is that you are seeking. When working with a supplier, you should establish a clear joint commitment that includes:
- Identifying the best solutions
- Upholding quality and efficiency
- A unified approach – essential for delivering premium end-to-end solutions
- Rapid adoption of evolving technologies
- A supplier engagement process
After pinning down a solid plan, it’s time to dive into the process. Let’s now take a walk through each step of the process:
1. Make/Design/Buy Analysis First
- Establish clear and concise details for products that will be sourced
- Analyze potential solution options
- Manage the preliminary purchase order and ensure it is understood and accepted
- Prepare sourcing activities
2. RFX is a catch-all term in strategic sourcing that captures all references to Request for Information (RFI), Request for Proposal (RFP), Request for Quote (RFQ), and Request for Bid (RFB). In this step, you will:
- Manage requests for information, proposal, and quotation
- Achieve signed agreements with suppliers that fulfill your business requirements
- Implement agreement
- Register, archive, and communicate agreement data to relevant systems, stakeholders, and users
3. Next is the actual placing of the order, when you:
- Create formal purchase orders to buy products
- Monitor delivery
Invoice to Payment according to contractual terms. Payment is often required prior to shipment.
- Manage Production and Quality Production Management – This focuses on upholding quality. Quality needs to be defined so that both the supplier and buyer understand and are in agreement. Defective products lead to unhappy customers, and have to be sold at a discount or written off entirely, further eroding your brand identity in that part of the world. A key part of an efficient supply chain is having a quality product all the way through it. After you’ve established what you want, devised a plan, figured out the logistics, and maintained quality management, you’ll have properly sourced with your customers’ best interests in mind!
Now that you better understand product sourcing, you’ll be able to take the necessary steps to ensure quality along the way. When it is done right, your customers receive the best – and that’s the core of what constitutes a successful business.