Do you remember the movie “Armageddon?” In it, a group of oil drillers is sent into space to save the world from a giant asteroid. In 2022, small business owners may find themselves in a similar situation.
The world economy is in a state of flux, and small businesses are feeling the pinch. Inflation is rising, supply chains are disrupted, and prices are volatile. To survive and thrive in this environment, small businesses need to be strategic about sourcing.
What is Strategic Sourcing?
Strategic sourcing is identifying and securing the best possible supplier for a given product or service. It takes into account all factors that impact cost and quality, including but not limited to price, delivery time, lead time, warranty, and terms of service.
Why is Strategic Sourcing Important?
Strategic sourcing is essential because it helps small businesses save money and improve quality. Strategic sourcing can help small businesses mitigate inflation, supply chain disruptions, and price volatility when done correctly.
How Can Small Businesses Benefit from Strategic Sourcing?
There are many ways small businesses can benefit from strategic sourcing. Here are just a few:
- Save money:
Small businesses can save money on their purchases by identifying and securing the best possible supplier.
- Improve quality:
Strategic sourcing can help small businesses improve the quality of their products and services.
- Increase resilience:
Small businesses can increase their resilience to supply chain disruptions by sourcing from multiple suppliers.
What Are the Steps to Strategic Sourcing?
There are four steps to strategic sourcing:
- Step One: Define the requirement.
The first step is to define the requirement. What product or service do you need? When do you need it? How much do you need? Answering these questions will help you create a request for proposal (RFP).
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- Step Two: Find potential suppliers.
The second step is to find potential suppliers. There are many ways to find potential suppliers, including online directories, trade shows, and word of mouth.
- Step Three: Evaluate proposals.
The third step is to evaluate proposals. When evaluating proposals, it is important to consider all factors that impact cost and quality, including but not limited to price, delivery time, lead time, warranty, and terms of service.
- Step Four: Select the supplier.
The fourth and final step is to select the supplier. Once you have chosen a supplier, it is crucial to establish a contract that outlines the terms of the agreement.
Being a small business owner is not for the faint of heart. It takes hard work, dedication, and a lot of hustle. But it can also be gratifying. To survive and thrive in 2022, you need to be strategic about your sourcing. Following the steps outlined in this blog post can save money, improve quality, and increase your resilience to supply chain disruptions.
So, what are you waiting for? Get out there and start sourcing!
MV Synergy Solutions is a powerpack team of versatile, innovative, and proactive sourcing consultants. We are a one-stop shop for all your strategic sourcing needs.