ABSTRACT
Best commercial sourcing practice entails the development of supply strategies for all key goods and services prior to actual procurement. If an organization can identify what adds value for their customers and deliver it successfully-while at the same time eliminating activities that don't add value for the customer, thus creating waste-they will have established a competitive advantage, which is the purpose of a strategic plan. Outsourcing can also sometimes involve transferring employees and assets from one firm to another. Logistics is always a good candidate for outsourcing, as are manufacturing and assembly. Companies can choose to go with many suppliers or few suppliers for some materials or products as a supply chain strategy. Best practices today involve analyzing spending, segmenting it into major commodity groups based on their value to the enterprise and their vulnerability, and prioritizing them for initial purchasing and supply management efforts. The categorization process occurs in coordination with the organization's procurement strategy.
