Turning Suppliers into Partners: Total Cost Management Through Strategic Sourcing

Learn how to expand your company's purchasing focus to include strategic alignment and information exchange with your suppliers in order to improve profit margins and gain a competitive edge.

In today's global economy, original equipment manufacturers (OEMs) are under intense competitive pressure to drive top-line revenue, reduce operational costs, increase market share and accelerate innovation. They also feel pressure to push toward global outsourcing to low-cost regions of the world. This has led many to look to their suppliers and partners to maximize competitive advantage through faster time-to-market and cost reductions, as well as to seek ways to improve profits.

Those OEMs have shifted their strategic sourcing initiatives toward total cost management (TCM), making their suppliers strategic partners with the purchasing function's focus on total cost and lean supply chain strategies. Total cost management is one way for manufacturers to drive top-line revenue growth by using supplier capabilities to bring products to market faster. In addition, the strategic sourcing component of TCM reduces the largest cost item to hit a manufacturer's bottom line