Why Every Business Must Master the Art of Sourcing Strategy (SCOR S1.3)
In every supply chain, there’s one decision that quietly sets the foundation for everything that follows: how and where you source what your business needs. That’s why S1.3 – Develop Sourcing Strategy is one of the most essential direct-source steps in the SCOR framework — and one that every organization, no matter how large or small, must do well.
🔍 What is S1.3?
This step is about building a strategic sourcing plan that aligns what you buy with your business needs, marketplace conditions, and internal/external constraints. It’s not just about choosing vendors — it’s about designing the how of procurement:
- Will you develop the product in-house or buy it?
- Should you tender it competitively or use a known supplier?
- Should you dual-source to reduce risk, or consolidate for efficiency?
- Are there sustainability or ethical sourcing obligations to meet?
- How do you balance in-country value with global economics?
These questions aren’t just theoretical. They’re operationally critical.
⚙️ Best Practices to Consider
A sound sourcing strategy doesn’t come from gut feel — it’s built on proven practices. The SCOR model lists over 20 best practices to guide this process, including:
- BP.100 Strategic Sourcing
- BP.162 Long-Term Supplier Partnerships
- BP.256 Make or Buy Analysis
- BP.266 Total Cost of Ownership
- BP.246 Sustainable Procurement Strategy
- BP.259 Restricted Tendering
- BP.258 Open Tendering
- BP.278 Portfolio Analysis
- BP.233 Ethical Procurement
These help ensure your sourcing plan is data-informed, risk-aware, aligned with business goals, and delivers long-term value.
📊 Key Metric: Sourcing Plan Cycle Time
Speed matters. The longer it takes to finalize your sourcing strategy, the more delayed your project or product launch becomes. That’s why SCOR tracks RS.3.52 – Sourcing Plans Cycle Time. Reducing this cycle without sacrificing quality is a sign of sourcing maturity — and a major competitive advantage.
💡 What Good Looks Like
A robust sourcing strategy involves:
✅ Clear sourcing goals aligned to business needs
✅ Cross-functional input (supply chain, legal, technical, sustainability)
✅ Insightful spend and market analysis
✅ Supplier segmentation and risk profiling
✅ Ethical and sustainable sourcing considerations
✅ Transparent decision-making (make vs. buy, tendering type, TCO)
It also includes the people capabilities to support strategic sourcing — planning skills, cost modeling, partnership management, and procurement governance.
📍Why You Can’t Skip It
Sourcing isn’t just a procurement task. It’s a strategic capability that shapes cost structure, resilience, sustainability, and innovation potential. Skipping or under-developing this step exposes your organization to:
- Unnecessary cost
- Poor supplier performance
- Legal and regulatory risks
- Supply disruptions
- ESG exposure
- Weak negotiation power
🔁 Next Step: S1.4 – Pre-Procurement Market Testing
Once your sourcing strategy is in place, the next move is to test the waters — to validate your assumptions, assess supplier interest, and refine requirements. That’s where S1.4 Pre-Procurement Market Testing comes in — but more on that in our next blog.
📢 Need help building or improving your sourcing strategy?
At SupplyChainPlanning.ie, we work with organizations to assess and optimize sourcing using SCOR best practices. Whether you need a structured tendering strategy, sustainable procurement support, or just help making sense of sourcing options — we’re here to help.
