Struggling to Identify the Right Suppliers? Intelligent Sourcing Can Help

Have you noticed a change in the way your company sources its raw materials? What has changed specifically? And what has led to this change?

Sourcing is a difficult yet crucial function in procurement. Where to source raw materials from, how to check product quality and how to evaluate and shortlist suppliers are some of the key challenges in this process. Not forgetting prices to get the best value for money.

Rising input costs, geopolitical conflicts and supply chain disruptions have aggravated the problems of sourcing managers.

Too many disruptions in recent times have meant that sourcing from faraway offshore locations has become less popular. It has also meant that pricing, although still important, cannot be the single factor to decide on a sourcing strategy. Instead, businesses must also consider supply-related risks and ways to mitigate them.

Additionally, changing consumer expectations have also led to changes in sourcing strategies. Consumers today demand sustainable products and services, faster deliveries as well as transparency in supply chains.

If they are not satisfied with transparency or ethical standards in supply chain operations, they are likely not to buy a product.

How can procurement teams overcome these challenges and get this aspect of their operations right?

Let’s find out.

What is Intelligent Sourcing?

Intelligent sourcing involves the use of data and technology in sourcing processes. It allows sourcing managers to follow a structured, data-driven approach to supplier selection, performance monitoring and other key tasks.

The use of advanced technology and tools provides category managers a comprehensive view of market insights and strategic guidance throughout the procurement life cycle, says Krish Vengat, vice president of consulting at GEP in a recent webinar. This intelligence empowers managers to take full charge of each category and tap into preloaded critical market insights across hundreds of categories, he adds.

Sourcing tools simplify the process of supplier selection with recommendations based on category, region and specific requirements. They also use predictive and prescriptive analytics to classify and scrutinize data and promptly alert supply chain teams. Additionally, they can identify new innovative suppliers and create more opportunities for supplier-driven innovation.

The key objective of intelligent sourcing is to make informed decisions based on analysis of vast amounts of data gathered from different sources such as supplier performance, market trends and internal operational data. Improved decision-making helps streamline supplier selection, contract negotiation and supplier relationship management.

Additionally, intelligent sourcing helps break down functional silos by providing a centralized platform for all stakeholders. This promotes cross-functional collaboration and communication between internal teams.

High-Tech Features of Intelligent Sourcing

Intelligent sourcing solutions simplify the entire sourcing process and enhance user experience with several advanced features. These include:

• Supplier intelligence

As supplier database and sourcing database are the same, you get instant access to detailed supplier profiles, scorecards and past performance data. You can also evaluate relationships with existing suppliers before inviting them for a new RFP.

• Real-time auctions 

With an intelligent sourcing solution, you can create an auction in the same way as an RFP and enable real-time bidding. In this way, you can stimulate more competition for your business and achieve competitive pricing.

• Sourcing dashboards 

These dashboards provide complete visibility of all sourcing events — RFIs, RFPs, RFQs and auctions — across the enterprise. You can drill down the dashboard to filter and select parameters you need to get the metrics and insights for individual categories.

• Sourcing repository 

You can access an extensive sourcing repository and speed up the RFX process by eliminating redundant questionnaires and information requests sent to your suppliers. You can also build a library of best-practice templates, by category, region or business, and turn successful RFPs into templates for future use.

Intelligent sourcing solutions seamlessly connect planning, sourcing, contracting and purchasing. This means that you do not have to juggle between multiple tools for source-to-pay processes. Instead, you can carry out all these functions on a single, unified platform.