Technology solutions are revolutionizing the way companies are interacting with their suppliers, allowing organization to realize important saving from demand and use of more efficient procurement processes. And as B2B drives the marketplace, E-procurement solutions are increasing. This increased focus on E-procurement solutions and capabilities has changed the traditional purchasing function. E-Sourcing opportunities provide competitive advantage by significantly influencing the price and quality of purchased materials and services, as well as improving supply chain responsiveness. And ultimately, as technology continues to enable increased collaborative activities among trading partners, the result will be seamless, transparent supply chain integration.Strategic SourcingThe aim of strategic sourcing is to find the highest value, service and lowest total cost sources and supply in order to ensure the availability of materials and services for value adding activities. The strategic sourcing must also ensure that every sourcing decision take care about value and cost, such considerations can be ensured by involving procurement earlier in the process. Each sourcing strategy will be developed based on the unique attributes of each category in accordance with its business impact and supply market complexity:Strategic sourcing initiatives generally begin with a determination of the total cost of ownership (TCO) of goods and services. This includes total acquisition costs combined with lifecycle costs. Total acquisition costs are composed mainly of purchase price. Other cost elements may include transportation, materials handling and storage, training (for new suppliers, products, or services), technology testing and approval, supplier qualification, and supplier retooling costs (for new or customized products). To be successful, a company must be able to quickly calculate its TCO according to the live data that alert the company when any components have changed. Then, the company can quickly weight the effects of change on any elements of its total cost and transit time to optimize global sourcing and deliver immediate, positive, bottom-line results for the company.In order to create value, the implementation of strategic sourcing process "relies on the ability to undertake fact-based negotiations". This method is based on a win-win approach rather than a traditional supplier-buyer relationships (based on win-lose approach). Suppliers analysis provide strong knowledge about cost drivers and the capability of each potential supplier, then fact-based negotiations help to provide information concerning the suppliers alignment in order to compare it to the company's sourcing requirements. Such a selection also deals with specific issues such as data on item purchases volumes, inventory levels, cost history / delivery and services requirements which will help to define the categories within the TCO model. Then, the company have to define supplier select...
