Financial Intelligence for Supply Chain Managers: Understand the Link between Operations and Corporate Financial Performance

10. Sourcing and Supply Management

All organizations purchase goods and services; however, this task is not as simple as it appears. The importance of sourcing cannot be overstated. Sourcing and supply management are vitally important for organizational success and competiveness. Sourcing decisions are both strategic and operational. Each has financial, environmental, and social consequences. Further, sourcing decisions directly impact company revenues and costs, in addition to exposing it to risk factors.

Sourcing and supply strategies, policies, and processes should be extended and be in alignment with the corporation’s mission, objectives, and competitive advantage (Figure 10.1).

Figure 10.1 Sourcing strategy alignment.

Since companies ...