Strategic sourcing is a collaborative and holistic approach to supply chain management that uses fact-based analysis to acquire the organization’s current and future needs at the lowest total cost of ownership (TCO) and risk.
This concept causes the purchaser to focus on the needs of the entire organization, rather than just the current needs of one area. For instance, focusing on fully understanding your own value proposition as well as the end customer’s needs and procurement processes, market conditions, and supplier capabilities to achieve the company’s overall, broader goals.