Developing strategic sourcing strategy for better supply chain performance

Abstract

The recent year's development in the industry has led to procurement activities increasing in their importance. With companies increasing their activities in global sourcing and the intensity of cost pressure, companies have no choice but to respond to this changing landscape. In order to cope with this development, companies are developing new sourcing strategies as a way to achieve greater competitiveness and enhance the overall supply chain performance. It also means there need to be a paradigm shift in the areas of supplier relationship management. The traditional arms length approach will no longer be sufficient to build a successful working relationship together. Instead, companies need to move into mutual collaboration with suppliers in order to align their suppliers strategically within the supply chain network.