Category Assessment

The first step in our strategic sourcing process is to conduct a thorough assessment of each spend category. This involves:

Identifying potential suppliers: We leverage industry research, supplier directories, and our own network to identify a list of potential suppliers for each category.
Issuing Requests for Quotation (RFQs): We send detailed RFQs to potential suppliers, outlining our requirements and asking for pricing, lead times, and other relevant information.
Evaluating proposals and conducting negotiations: Our team carefully reviews each proposal, comparing prices, services, and qualifications. We then enter into negotiations with the most promising suppliers to secure the best possible terms.
Awarding the contract: Once negotiations are complete, we award the contract to the supplier that best meets our needs. This is typically the supplier that offers the optimal combination of price, quality, and service.

Strategy Development and Execution

With the category assessment complete, we develop a customized sourcing strategy for each commodity. This involves:

Categorising the commodities: We group similar commodities together to leverage our spend and negotiate better terms.
Mapping the spend profile: We analyze our historical spend data to understand our purchasing patterns and identify opportunities for consolidation or optimization.
Obtaining detailed specifications: We work with our internal stakeholders to obtain detailed specifications for each commodity, including quality requirements, delivery schedules, and any other relevant criteria.

Negotiation and Contract Finalisation

With our strategy in place, we enter into negotiations with the selected suppliers. This involves:

Preparing a transition plan: We develop a detailed plan for transitioning to the new supplier, including timelines, milestones, and responsibilities.
Implementing contract process and strategy changes: We work with our internal teams to implement any changes to our contract processes or strategies.
Defining performance metrics: We establish clear performance metrics and key performance indicators (KPIs) to measure the supplier’s performance over time.

Implementation and Transition

Once the contract is finalised, we begin the implementation and transition process. This involves:

Implementing the transition plan: We execute the transition plan, ensuring a smooth handover from the incumbent supplier to the new supplier.
Studying commodity types: We conduct a deep dive into each commodity type, understanding market trends, pricing dynamics, and other relevant factors.
Mapping commodities consumption and spend: We analyze our consumption patterns and spend data to identify opportunities for further optimization.
Analyzing supply and market: We monitor market conditions and supply chain risks, adjusting our strategies as needed to mitigate any potential issues.

Supplier Relationship Management

The final step in our process is to actively manage and develop our relationships with our suppliers. This involves:

Measuring supplier performance: We track each supplier’s performance against the established metrics and KPIs, providing regular feedback and coaching.
Managing and improving performance: We work collaboratively with suppliers to address any issues or areas for improvement, implementing corrective actions as needed.
Incorporating lessons learned: We conduct regular reviews of each supplier relationship, documenting lessons learned and applying this knowledge to future sourcing initiatives.

By following this structured process, Stellar Innovations is able to drive significant value from our sourcing activities, while building strong, collaborative relationships with our suppliers. Whether you’re a potential supplier or a current partner, we invite you to learn more about our approach and how we can work together to achieve mutual success.