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Sourcing & Suppliers

Sourcing Strategy

A sourcing strategy is a plan for how an organisation will buy a category of goods or services to meet cost, quality, risk and supply objectives.

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A sourcing strategy sets out where demand will be met, how many suppliers to use, what commercial model to pursue and how much competition to introduce. It starts from the organisation's needs and spend profile, then weighs options such as consolidating volume, tendering openly, or building a longer-term partnership. The aim is a deliberate approach rather than repeated reactive buying.

Good strategies are category-specific: a high-value, high-risk item warrants a different approach from a routine consumable. The plan should reflect market conditions, internal priorities and available leverage, and it should be revisited as prices, demand and supply risk change. It provides the framework within which individual tenders and negotiations are run.

Key points

  • It defines the number of suppliers, commercial model and degree of competition.
  • It is category-specific and driven by spend profile and supply risk.
  • It gives structure to individual sourcing events rather than ad-hoc buying.

Frequently asked questions

What is a sourcing strategy?
A sourcing strategy is a plan for how an organisation will buy a particular category of goods or services to meet its cost, quality, risk and supply-continuity objectives.
How is a sourcing strategy different from strategic sourcing?
Strategic sourcing is the disciplined process used to analyse spend and select suppliers; a sourcing strategy is the resulting plan that decides how a specific category should be bought.

Go deeper

Strategic sourcing guide

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