What is Strategic Sourcing in SAP SRD-SRM-SC - SRM-Sourcing and Contracting?

SAP Term: Strategic Sourcing

• Component: SRD-SRM-SC

• Component Name: SRM-Sourcing and Contracting

• Description: A scenario that enables you to identify and select suitable new suppliers and to manage relationships with existing suppliers in order to meet the routine purchasing requirements of your company. It involves the definition of requirements for a product, through to the identification and selection of the most suitable suppliers, and finally to the negotiation and creation of a purchasing contract with the chosen supplier.

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• Key Concepts: 
  Strategic Sourcing is a process used by organizations to identify and select suppliers for goods and services. It involves analyzing the organization’s current and future needs, researching potential suppliers, negotiating contracts, and managing supplier relationships. Strategic Sourcing is part of the SAP SRM-Sourcing and Contracting component. 
  
  How to use it: 
  Organizations can use Strategic Sourcing to identify the best suppliers for their needs. This includes researching potential suppliers, analyzing their capabilities, negotiating contracts, and managing supplier relationships. The SAP SRM-Sourcing and Contracting component provides tools to help organizations manage the entire process. 
  
  Tips & Tricks: 
  When using Strategic Sourcing, it is important to consider the long-term implications of selecting a particular supplier. Organizations should also consider the cost savings that can be achieved by selecting a particular supplier. Additionally, organizations should ensure that they are selecting suppliers that are compliant with applicable laws and regulations. 
  
  Related Information: 
  The SAP SRM-Sourcing and Contracting component provides tools to help organizations manage the entire Strategic Sourcing process. Additionally, organizations can use other SAP components such as SRM-Procurement and SRM-Inventory Management to manage their procurement processes.