Sourcing is a very complex process that requires a project plan. In this article we present a project plan that represents a typical sourcing project.

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Sourcing is a very complex process that requires a detailed plan.  In this article I present a high level sourcing project plan.xls. I’ve provided this plan in excel format as almost everyone has Microsoft Excel, but if you have Microsoft Project you can use this file high level sourcing project plan.mpp. . I will focus on overall layout so that you can alter the plan to fit your needs.
The plans provided in this article are a complete lifecycle approach to sourcing. Planning and estimating value to supplier performance management and impact on the next sourcing cycle.
The major tasks for sourcing involve:
•    Sell the sourcing project
•    Standup the project organization
•    Align customer requirements and sourcing strategy
•    Estimate the strategic sourcing opportunity
•    Categorize spend
•    Assess the supply base
•    Develop sourcing strategies
•    Conduct sourcing events
•    Establish negotiation strategies
•    Execute negotiations
•    Award contracts
•    Implementation, supplier monitoring and continuous improvement

The plan presented has one sample indirect commodity (Office Supplies) and one direct commodity for a manufacturer. You will need to adjust the number of commodities for your particular plan.
This plan is for a medium size organization of $1-$5 Billion in revenue. Costs of the project will vary based on your business model and complexity of your organizational model. The project plan assumes a national if not global enterprise with disparate systems. Procurement is not centralized. If these assumptions do not fit your situation and your sourcing/procurement processes and systems are more advanced then you can reduce the amount of time spend addressing organization and in data collection.
Sourcing in general revolves answering these basic questions:
•    What do you buy?
•    What volume do you buy?
•    Who currently buys in your organization?
•    Is anything you buy strategic?
•    Who currently selects suppliers in your organization?
•    Who are your suppliers?
•    What is your current supplier’s performance?
•    Can you forecast your volume over a period of time?
•    What will suppliers charge you if given a volume commitment or forecast?

Pricing discounts revolve around several very simple variables:
•    The amount of committed volume
•    The supplier’s status in the competitive market place
•    The defined services or product configurations that you commit to buying

There are other factors but they are usually temporary. These variables make sense as they reduce supplier’s costs through commitment to supplier’s production volumes, reduction of risk and scheduling of resources and production facilities.

The plan assumes that external customer requirements drive sourcing requirements. Many organizations assume that what they’ve bought in the past is what they should buy in the future, but this is a critically flawed assumption. This plan includes tasks that involve surveying the customer and reconnecting with their business model. Subtle changes in your customers business can dramatically affect your sourcing criteria. Many sourcing groups rarely interact with marketing and sales personnel and these groups are more involved in selling existing products and services. Even simple changes in your customers requirements can dramatically shift the suppliers you choose and the prices they charge.

Hopefully, this project plan will aid you and starting your own sourcing project.

Good Sourcing!