An Organization's Overall Business Strategy

Sourcing strategy aligns an organization's overall business strategy with the sourcing objectives. For example, it does not benefit an organization to select a supplier for a multiple- year agreement based on superior manufacturing capabilities and local presence if the organization is evaluating global outsourcing operations in support of business growth and cost competitive objectives. Second, when properly defined, a sourcing strategy assists an organization by gaining a true understanding of its requirements, knowing how it must map to the existing supply market, and then develop a plan for both short and long-term sourcing objectives. Having a clearly defined sourcing strategy will significantly improve both the quality of the results and the speed required to achieve an organization's sourcing objectives.

Strategic Sourcing is so comprehensive; results in a cross-functional/cross- enterprise effort intended to optimize the "concept-to-cash" supply chain performance. It is an ongoing endeavor to evolve both internal and external processes to obtain the highest level of strategic benefit for a business. When done correctly, the results are immense and ultimately position an organization to achieve a competitive advantage in the marketplace through its suppliers.

Here is a review of some success barriers commonly encountered in sourcing. Key barriers have been divided into three broad categories - leadership, team, and project issues. It defines the major barriers that must be addressed to allow a sourcing team to focus on clearing the path for strategic sourcing.

Leadership Issues

Of our nine major barriers to success, three of them are tied to leadership. For sourcing to be successful, it requires a senior executive champion and support at the CxO level.

Invisibility
Leadership: invisibility is the result of limited visibility of a senior sourcing leader - whether there is no C-level representation, or there is no strong, vocal leadership at the C-level. Most importantly, it affects the Sourcing Team's credibility across the entire organization. Leadership visibility can affect different areas.

* C-level visibility: A visible sourcing leader drives credibility across the entire company. A strong leader builds organizational structure, ensures sourcing team integration with other business units and actively manages a budget.

* Sourcing team visibility: