Strategic sourcing and category management


Strategic sourcing and category management

Table of Contents

Strategic sourcing and category management are key components of business today, ensuring you get the best products suited to your business and for the best price, as well as hitting each specific criteria you have for your company. This can be difficult for any business, be it large or small, and that is why it is best to utilize experts like SourceOne to ensure you are getting the very best for your specifications. From supplier identification and contract management to cost saving, to ensuring you have the best approach implemented for each category of product, we can help you meet your business goals.

We will begin with a brief overview of strategic sourcing and category management, and outline some of the differences between the two so you can get an idea of what it is we do, and which is right for you.

What is Strategic Sourcing?

Sourcing in general has been a term used for decades to describe the process in which the best product or service is found for a particular area. With strategic sourcing, this process is continually working to assess current needs and the corresponding purchasing opportunities, to ensure the best savings but also the best fit. The strategic aspect of strategic sourcing is in assessing the entirety of the cost from beginning to end, not just the low price of the materials. Today sourcing must be strategic or else it is ineffective and inefficient for your business.

Strategic sourcing is a collaborative effort to match up not only the lowest prices but also the standards of quality and convenience, lining up with the companies goals and identity. In essence, strategic sourcing is smart purchasing, ensuring you get everything you need in one fell swoop. Strategic sourcing can ensure huge savings for your business, but it must be specific to you, targeted correctly and continuous to be the most effective. Strategic sourcing allows you to get better value out of your procurement function, a reduction in cost and access to a wider supplier network. Supplier selection is a crucial component of any sourcing approach and SourceOne offers a comprehensive approach to make certain you get the best price, the best quality and the best service. There are huge numbers of factors that go into supplier identification alone, from regional differences to supply chains to ensuring a healthy and productive relationship with the correct quality levels for your business. The best way to ensure a successful and adapting process of strategic sourcing is to capitalize on the expertise, market knowledge and relationships already established in groups like SourceOne.

What is Category Management?

While in some ways similar to strategic sourcing, or rather that they can be part of the same process, category management involves the breaking up into ‘families’, distinctive groups or categories, of materials or products based on the factors chosen such as how similar they are. After these products have been split into their distinct categories, they are then treated as one unit. Once organised, this approach allows you to focus on the particular area of spend, and again gives you a strategic approach to procurement of products. These products or services that are in the same category allow for maximum utility and also allow you a better look at each category within the business and manage it as required. This allows for joint purchasing influence to substantially reduce the total cost of purchases. It requires a large amount of team work and cooperation, efficient technology and analysis to get the best results. Improved delivery time is also an important factor and critical to business as well as bulk buying and means that category management is important in gaining the best price.

How is Category Management different from Strategic Sourcing?

While some people argue that they are two parts of the same process, it is generally agreed that strategic sourcing is more savings-focused, aiming to get the best price through an advantageous contract, looking at extra costs and all that is involved from transport to labour. Category Management, on the other hand, moves beyond just the cost side to meet your overall business objectives. It is a way to drive value by sourcing each category and sub-category, using strategic sourcing and other processes to achieve your goals. Category management is often considered the more mature, and complete approach, going beyond strategic sourcing but also as a more long term approach for your business. It is a broader approach, with an integrated strategy for each category while also developing and integrating best practice techniques to best meet the needs of the company.


Both strategic sourcing and category management are ways to reduce your cost, ensure a better quality to price ratio and aim to meet the goals of your business. However, for businesses of every size it can be a real hassle finding the best goods or services available, at the best price while ensuring they comply with your values. Here at SourceOne, we can help meet your goals, whether you are starting out with a product or are simply looking for someone to find you the best contracts with the biggest savings. With both strategic sourcing and category management we can suit your individual needs and ensure quality and a targeted approach that hits your targets. For more information contact us today.