Strategic Sourcing

"Strategic Sourcing is the collaborative and structured process of critically analyzing an organization's spending and using this information to make business decisions about acquiring commodities and services more effectively and efficiently" (OMB Memorandum, Implementing Strategic Sourcing, 20 May 2005). Put another way, strategic sourcing is the process of developing supplier relationships through a disciplined, systematic process of effectively sourcing materials, products, and services to make the supply chain more effective:

 

- Strategic planning vs. tactical planning
- Enterprise-wide business arrangements
- Commodity councils
- Long-term corporate contracts when applicable
- Supplier alliances with critical suppliers

 

Strategic sourcing helps the Department optimize performance, minimize price, increase achievement of socio-economic acquisition goals, evaluate total life cycle management costs, improve vendor access to business opportunities, and otherwise increase the value of each dollar spent. Strategic sourcing is a proven best practice and reflects how the Department acquires goods and services. Benefits include leverage and cost reduction, risk reduction, improved performance and cycle times, and price stability.

On 11 March 2013, the Director of Defense Procurement & Acquisition Policy (DPAP) issued a memorandum entitled “Strategic Sourcing Website” describing the ongoing and planned enhancements to broaden the scope of the DPAP “Strategic Sourcing” website.  Added website features include:   

• A taxonomy section, organizing DoD spend to enable portfolio management, spend analysis, and the establishment of baselines for measuring progress. 
• A spend analysis section, identifying spend patterns and buying practices of services, supplies, and equipment from both the requiring office and contracting office perspectives. 
• A section entitled, "Learn about Strategic Sourcing," identifying the DoD strategic sourcing framework and key doctrines of strategic sourcing. 
• A section entitled, "What  Is the DoD-Wide Strategic Sourcing (DWSS) Program?" explaining how the DWSS Program helps DoD achieve "Better  Buying Power" mandates and improve acquisition efficiencies with a comprehensive application of strategic sourcing processes to achieve increased effectiveness and reduced costs. 

The  DPAP “Strategic Sourcing” website also offers links to related resources, such as: 

• The Departments of Navy's and Air Force's strategic sourcing websites; 
• The Defense Acquisition  University's Better Buying Power Gateway; 
• Strategic-sourcing and spend-analysis-strategies Continuous Learning Modules; and 
• DoD policy memoranda. 

You may also access the DPAP Strategic Sourcing website from the DAU Strategic Sourcing Community of Practice (SS CoP).