In the first part of this article, a brief summary of the different stages of evolution of the sophistication of Purchasing/Supply processes in companies was carried out, and then some data from the research carried out by the ILOS Institute on the level of implementation of supply strategies in companies located in Brazil, where the strategic sourcing initiative represented a significant part of the survey.
We observe, in this second part of this text, that almost half of the interviewed companies still do not use strategic sourcing and that this situation is the same observed two years ago, when another survey also by the ILOS Institute investigated this issue. The lack of evolution in the use of this methodology may indicate that our executives have not yet discovered the potential of this tool as a resource to leverage the performance of the Purchasing/Supply sector of their organizations.
We verified, still in the previous step, that, when comparing our results with those of another survey carried out abroad, we observed a level of implementation in our companies well below that found in the international scenario, which presented a result in which 72% of the sample of the survey used strategic sourcing and 8% had everything ready to start their operations with this new methodology.
Another interesting comparative data was related to the length of employment. Most Brazilian companies, or 49% of the sample, have used the methodology for a little over two years, while companies located in the surveyed countries* showed rates of 36% for over five years and 36% for between two years. and five years.
The second half of this article will address the reasons for using the strategic purchasing process and the reasons that lead companies to decide not to use this process.
- REASONS FOR USING STRATEGIC SOURCING
Figures 1 and 2 describe the reasons given by the companies for using the strategic sourcing methodology. The investigations were carried out, respectively, in the Brazilian survey and in the same survey conducted abroad, where most countries belonged to the European bloc. Respondents located in Brazil were offered the same reasons tested in the survey carried out abroad, to allow comparison between Brazilian companies and others.
It was observed that companies that have strategic sourcing in Brazil reported that the main reason for inserting the company in the path of establishing strategic Purchasing is the increasingly strong pressure to reduce the cost of purchased products and services. Undoubtedly, factors associated with the total cost of ownership assume unique importance in planning for the implementation of a strategic sourcing program, due to the potential gains that are anticipated.
It is also observed, supported by Figure 1, that the specialization initiative through process innovations, such as category management, has also been valued as one of the important reasons for implementing strategic sourcing. Management by categories has assumed significant representation among companies located in Brazil, even influencing the restructuring of their Purchasing departments. Another inference that it is possible to bring to the discussion of this text is the fact that, both in Brazil and abroad, the reasons appear in the same hierarchical order, that is, the pressure to reduce costs is the first reason in both surveys, as well as the pressure to improve visibility and control spending comes last.
Despite the fact that the same reasons appear in the same order in Figures 1 and 2, abroad, each reason was indicated in a smaller percentage than what occurred among Brazilian companies. It is possible that corporations located in Europe and other regions, because they are more sophisticated in the Purchasing processes, have fewer needs and therefore make choices of motives with less intensity. It is important to point out that companies could opt for more than one reason, without committing the sum to be 100%.
- REASONS NOT TO USE STRATEGIC SOURCING
Figure 3 presents the possible reasons for not using the methodology. It is observed that the most cited by the companies was the existence of limited resources for the implementation of e-sourcing. This is a mistaken view of the methodology's potential, as it demonstrates a restricted interpretation that strategic sourcing means the use of electronic tools to guide the acquisition of goods and services. E-sourcing does come in as a tool to simplify the acquisition of a set of categories and its recommendation stems from a much larger analysis, in which all categories are considered. In addition, there are several companies that provide outsourcing services in the use of electronic Purchasing tools, significantly reducing the need for investment in this area.
The second justification for not using strategic sourcing deals with the lack of knowledge of the dimension of the methodology and the benefits that can be obtained with the transformation of the Purchasing department towards a strategic positioning. Knowledge about the methodology is already widely disseminated through the vast literature on the subject.
Sources of this nature make it possible to anticipate opportunities for gain and reduce uncertainty regarding knowledge of the methodology.
![]() |
Positioned in third place as a justification for not using the methodology is the fact that executives do not see strategic sourcing as something critical. This situation must exist in companies that still purchase goods and services without the proper support of intelligence work. Everything is still very transactional, using traditional negotiation techniques and without major distinctions in the relationship with suppliers.
The next three reasons given by companies for not using the methodology, in descending order of importance, are related to resistance to adopting standardized sourcing procedures; insufficient visibility and accuracy of spending data; and lack of a formal purchasing or procurement organization. This indicates that these companies have not yet awakened to the importance of the Purchasing sector in the context of other sectors of the organization. The Purchasing sector of the aforementioned companies is in the early stages of evolution and needs to go through an internal organization process (“putting the house in order”) before effectively seeking to transform its processes from a strategic perspective.
![]() |
- CONCLUSION
Strategic sourcing can be considered as the benchmark for transforming Purchasing/Supply processes, as purchasing companies are no longer solely focused on the transactional aspects of purchasing and start to incorporate market intelligence and supplier relationship strategies in guiding their decisions to purchase goods and services.
The survey carried out by the ILOS Institute in 2009 showed that, on average, half of the largest companies located in Brazil still do not use this methodology, and that this situation is practically the same as that previously found in the 2007 survey. Additionally, even the other half that have already implemented the program started using it, on average, 3,7 years ago, indicating the lack of maturity of this initiative.
There are several reasons that justify the use of strategic sourcing, as presented in this text. The research showed that the pressure for price reduction was the main one, mentioned by 74% of the interviewed companies. This isolated fact would already be a great sign of awakening for those who do not use the methodology. However, companies still present justifications for their delay, such as “uncertainty about how to start strategic sourcing” and “executives do not see strategic sourcing as something critical”.
![]() |
The facts described in this text allow us to infer that we are still in the early stages of developing this methodology in Brazil and that there is still much room for improvement in the sophistication index of our Purchasing/Supply processes.
BIBLIOGRAPHIC REFERENCES
Anderson, MG; Katz, PB. Strategic Sourcing. The International Journal of Logistics Management, v.9, No. 1, 1998.
Braga, AR. Strategic Evolution of the Process of Purchasing & Supplies of Goods and Services in Companies. Tecnologística Magazine, São Paulo, No. 1. 1998
Freytag, P.V.; Kirk, L. Continuous Strategic Sourcing. Journal of Purchasing & Supply Management, v.9, No. 9, 2003.
Houghton, T.; Markham, B.; Televelson, B. Thinking Strategically about Supply Management. Supply Chain Management Review, September-October 2002.
Jennings, D. Strategic Sourcing: benefits, problems and a contextual model. Management Decision, v.40, nº ½, 2002.
Park, HY; Reddy, CS; Jurn, I.. Sourcing strategies of manufacturing firms: transaction cost implications. American Journal of Business, v.16, No. 2, 2001.
Sislian, E.; Satar, A. Strategic Sourcing: a framework and case study. Journal of Supply Chain Management, v.36, No. 3, 2000.
Smeltzer, LR; Manship, JA; Rosseti, CL. An analysis of the integration of strategic sourcing and negotiation planning. The Journal of Supply Chain Management, v.39, No. 4, 2003.
Wolf, HH. Making the transition to strategic purchasing. MIT Sloan Management Review, v.46, No. 4, 2005.
* The survey was conducted in the following countries: Austria, Belgium, Croatia, Czech Republic, Denmark, England, Estonia, Finland, France, Germany, Greece, Hungary, India, Iran, Ireland, Israel, Italy, Kenya, Netherlands, Nigeria, Poland , Romania, Russia, Saudi Arabia, Slovakia, South Africa, Spain, Switzerland, Sweden, Turkey and United Arab Emirates, totaling 230 companies interviewed.