How can you align your sourcing strategy with industry standards?

1 What are industry standards for sourcing?

Industry standards are the norms, rules, and expectations that govern the sourcing activities and performance of businesses in a specific sector or market. They can range from formal to informal, explicit to implicit, and vary across different regions, cultures, and regulations. Various aspects of sourcing can be covered by industry standards, such as supplier qualification and selection criteria, contract terms and conditions, pricing and payment methods, quality and delivery standards, social and environmental responsibility, supplier relationship management, and sourcing performance measurement and improvement. The influence of industry standards can come from customer demands, competitive pressures, technological changes, regulatory requirements, and industry associations. They can also evolve over time as the market conditions and best practices change.

2 Why align your sourcing strategy with industry standards?

By aligning your sourcing strategy with industry standards, you can receive a multitude of benefits. These include enhancing credibility and reputation, improving sourcing efficiency and effectiveness, reducing risks and costs, increasing opportunities and competitiveness, and supporting innovation and differentiation. This doesn't mean that you have to copy what others are doing without thought. Rather, it means that you should understand the expectations and best practices of your industry and use them as references and benchmarks for your sourcing decisions. However, you can still customize your approach to suit your specific business needs and goals while complying with the minimum requirements and standards of your industry.

3 How to align your sourcing strategy with industry standards?

Aligning your sourcing strategy with industry standards requires a systematic and continuous process that involves four steps. The first step is to research and identify the relevant standards for your sourcing activities, which can be done by consulting industry experts, publications, webinars, and networks. The second step is to analyze and compare the industry standards with your current sourcing strategy and performance. This can be done by using SWOT analysis, gap analysis, benchmarking, and scorecards. The third step is to plan and prioritize the actions and initiatives needed to align your strategy with industry standards. Involving customers, suppliers, and internal stakeholders in the planning process is essential for buy-in and support. The fourth step is to implement and monitor the actions and initiatives planned. This can be done by using project management, change management, communication, training, and evaluation. It's important to review and update the sourcing strategy regularly to keep up with changing industry standards and market conditions. Leveraging sourcing data can also help identify new trends, challenges, and opportunities for sourcing activities and performance.

4 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?