How do you evaluate the impact of your sourcing decisions?

1 Sourcing objectives and criteria

Before you can evaluate the impact of your sourcing decisions, you need to define your sourcing objectives and criteria. What are the goals and priorities of your sourcing strategy? What are the key performance indicators (KPIs) and metrics that you use to assess your suppliers and your sourcing performance? How do you align your sourcing objectives and criteria with your business strategy and stakeholder expectations? These are some of the questions that you need to answer to establish a clear and consistent framework for sourcing evaluation.

2 Sourcing data and analysis

Once you have defined your sourcing objectives and criteria, you need to collect and analyze the relevant data to measure and evaluate the impact of your sourcing decisions. This can include data on cost, quality, delivery, compliance, innovation, sustainability, and risk of your suppliers and your sourcing activities. You can use various tools and methods to gather and analyze sourcing data, such as spend analysis, supplier scorecards, supplier audits, market research, benchmarking, and surveys. The key is to use reliable and accurate data that reflects your sourcing objectives and criteria.

3 Sourcing feedback and communication

Another important aspect of sourcing evaluation is to obtain and communicate feedback from your internal and external stakeholders. This can help you to identify the strengths and weaknesses of your sourcing decisions, as well as the opportunities and challenges for improvement. You can use different channels and methods to solicit and communicate feedback, such as meetings, reports, dashboards, reviews, and surveys. The key is to engage your stakeholders in a transparent and constructive dialogue that fosters trust and collaboration.

4 Sourcing action and improvement

The final step of sourcing evaluation is to take action and implement improvement based on the results of your data analysis and feedback. This can involve making adjustments to your sourcing decisions, such as changing suppliers, renegotiating contracts, optimizing processes, or adopting best practices. It can also involve setting new or revised sourcing objectives and criteria, as well as developing and executing action plans to achieve them. The key is to monitor and track the impact of your actions and improvements on your sourcing performance and outcomes.

5 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?