Strategic Sourcing

• What is Strategic Sourcing?
• Strategic Sourcing in the CRA
• Strategic Sourcing Benefits
• Strategic Sourcing Characteristics

What is Strategic Sourcing?

Strategic sourcing is a contractual arrangement that establishes a long-term relationship with a vendor or groups of vendors to supply goods and/or services on a best value basis. Strategic sourcing is directly linked to the CRA's e-procurement initiative and enables the Agency to fully optimize processes, service delivery, and product availability by providing users with easy-to-use online access to goods and services.

Strategic Sourcing in the CRA

The first strategic sourcing initiative in the CRA was initiated by the Materiel Management Directorate and was completed August 2002. Through this initiative, the CRA awarded a national contract to one supplier for the provision of office supplies to the entire Agency. The CRA implemented its own e-procurement tool, WBRO, which included the electronic catalogue for office supply items containing best value pricing and delivery guarantees.

The CRA is adopting strategic sourcing as a preferred method of supply in order to meet the following goals and objectives:

• Leverage buying power
• Achieve cost savings
• Timely acquisitions
• Foster strategic relationships
• Streamline internal business processes
• Improve overall efficiencies in the CRA

Other strategic sourcing initiatives are underway for high volume goods and services and will be added to the e-procurement portal once finalized.

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Strategic Sourcing Benefits

Achieving the above goals and objectives, the CRA strategic sourcing initiative, combined with e-procurement, will generate the following benefits:

• Increased operational efficiency
• Reduced processing costs
• End-to-end automation of procurement and payment
• Shifting of routine transactions to end users at their desktops
• Enforcement of business rules
• Ensure products standards are met
• Defined business process workflow
• Targeted inventory and volume specifications
• Centralized helpdesk for issue resolution and communication

Strategic Sourcing Characteristics

By its nature, a strategic sourcing arrangement offers greater flexibility than a regular contract. Some of the determining characteristics of this innovative procurement direction include:

• The use of a competitive process through Requests for Proposals (RFPs)
• A direct relationship with the vendors
• The targeting of specific frequently purchased, low-dollar value goods and services with known procurement volumes
• Economies of scale through the Agency's increased buying power, by consolidating regional procurement requirements
• Improved agreed-upon-terms and conditions such as services at set prices with guaranteed delivery timeframes and payment methods
• Bi-directional Service Level Agreements for both parties
• The use of government-approved acquisition cards as the designated method of payment, providing immediate savings for the Agency through reduced inventory investment and administrative costs and direct fast payment to the vendor