Strategic Sourcing

Strategic sourcing involves leveraging the university's overall spend with fewer suppliers, going through the process of establishing contracts as a university as opposed to every department and school having to go through the process themselves. The ultimate goal is to save departments and schools money, time, and resources.

The university's strategic sourcing strategy involves establishing relationships with suppliers who provide deep discounts on products and services. The leverage of the university increases as the spend on strategic contracts increases, creating the opportunity to increase and expand discounts, enhance service, and demonstrate to competitors the value of the contracts for the next cycle of strategic sourcing. Benefits of strategic sourcing include improved negotiation power for the university to reduce costs, improved contract and supplier performance management, and lower overall procurement process cost through the reduction in the number of transactions that require the competitive bid process.

While the price of an item offered by a retailer may be less in dollar amount, the purchase of the item usually does not offer the lowest overall cost or best value for the university. This is because "hidden" expenses also factor in to the university's cost of buying items from retail stores. Therefore, ordering through our strategic suppliers is the most efficient use of university resources and the best overall value for the university.


Establish Contract

  • Analyze spend in terms of dollars and number of transactions.
  • Talk to department and schools.
  • Establish evaluation committee.
  • Issue formal invitation to bid (using templates created by Procurement Services):
    • Evaluate proposals.
    • Conduct best and final offer/final negotiation.
    • Enter into formal negotiation with sole source suppliers.
  • Award contract/agreement based on best value decision:
    • Consider price, delivery, quality, past performance, compliance, customer service, and financial capabilities amount other factors.


Contract Administration

  • Monitor supplier or contractor performance and service levels.
  • Solicit Feedback from department and schools.
  • Change and update product offerings to better meet needs.
  • Validate that prices being charged are correct and consistent.
  • Monitor industry and spend and negotiate improved pricing when appropriate.

Spend Analytics

We optimize strategic sourcing through spend analysis, which involves identifying, gathering, cleansing, grouping, categorizing and analyzing data. We use real-time data and analytics to provide insight needed to realize the following benefits: cost reduction, cost avoidance, revenue, incentives, and efficiencies.

Cost reduction and cost avoidance
Revenue and Incentives

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