e-Procurement: From Strategy to Implementation

Vendor Rationalization

All of this means that the value and need for strategic sourcing has come under fire. The tendency for trading hubs and the e-marketplace is to move to many suppliers instead of to just a few. At issue is the fact that the whole value of vendor rationalization and strategic sourcing comes from consolidation and leverage of a company’s best and most trusted suppliers. The basis for successful strategic sourcing is therefore to restrict the number of preferred vendors, and yet with the expansion of e-market portals, the trend is moving in the opposite direction. The logic behind the Internet-based auction is to treat all materials as commodities, driving prices down. That means, generally, the more vendors, the fiercer the ...