"3. Evaluate internal requirements: Requirements and specifications must be thoroughlyassessed and rationalised as part of the sourcing process.4. Focus on supplier economics: You need to understand suppliers’ economics beforeidentifying buying tactics such as volume leveraging, price unbundling, or priceadjustment mechanisms.5. Drive continuous improvement: Strategic sourcing initiatives should be a subset of thecontinuous improvement process for the overall procurement and sourcingorganisations.Seven key steps are included in the overall strategic sourcing methodology:Step 1: Project Planning and Kick-off (2 weeks)Key deliverables/outcomes: Project charter, project kickoff, communicationsStep 2: Profile Spend; Identify or re-evaluate needs; Define and evaluate userrequirements; Decide whether to make or buy (2-3 weeks)Key deliverables/outcomes: Spec review, total cost modelStep 3: Assess Supply Market. It involves making sure that all potential sources ofsupply are identified and that useful mechanisms are in place for meaningfulcomparisons of alternative supply sources (4-8 weeks)Key deliverables/outcomes: Request for information, supplier listingStep 4: Develop Sourcing Strategy: It is important to fully develop a sourcing strategythat defines the parameters of the process and the steps to be followed (2-4 weeks)Key deliverables/outcomes: Sourcing strategy, request for proposal Step 5: Execute Sourcing Strategy: This step begins with an evaluation of the suppliersthat remain following the RFI (request for information) and RFP (request for proposal)processes and culminates in the award of a contract (6-12 weeks)Key deliverables/outcomes: Supplier selection, supplier letter of agreementsStep 6: Transition and Integrate: This activity occurs with the first attempt by thesupplier or suppliers to satisfy the user’s needs (3-4 weeks)Key deliverables/outcomes: Transition plans, supplier contractsStep 7: Measure and Improve Performance. This involves making a post-purchaseperformance evaluation (ongoing)Key deliverables/outcomes: Savings tracking, ongoing improvemen4 Strategic Sourcing Methodology4.1 Strategic Sourcing Methodology: Other deliverables and outcomes[This page should take about 3 hours to complete] Invocing After the Fact flickr photo by recreahq shared under a Creative Commons (BY-NC- SA) licenseOther deliverables and outcomes resulting from and important for strategic sourcing includematerial requisition, purchase orders, and e-procurement:Material Requisition (MR):A purchase requisition, instead of a material requisition, is used in some firms, statingproduct, quantity, and delivery date. It may originate as a planned order release from thematerials requirement planning system. Traveling Requisition might be used forrecurring orders.Purchase Order (PO):Is the buyer’s offer and becomes a binding contract when accepted by supplier. Wheninitiated by the supplier on their own terms, the document is a sales order. "