What is Strategic Sourcing?

Strategic sourcing is a procurement methodology that came to prominence in the 1990s in the private sector and only recently has been adopted by public sector and non-profit institutions.

In a nutshell, strategic sourcing means increasing an organization’s buying power to maximize the leverage it has with suppliers for the purposes of reducing cost, enhancing quality and increase minority and women owned business participation.

Governments accomplish this by aggregating the demand from all agencies and reducing the number of suppliers, oftentimes to a single supplier.