Steps in the Process

Understand

1. Understand the relative importance of a department, school, college or University’s various sourcing needs and how they support strategic goals.
2. Sourcing leadership assembles and leads a business specific multi-functional team (i.e. Commodity Councils) to execute the Strategic Sourcing process including diagnostics and prioritization:
   • - Get historical spending data; perform diagnostics
   • - Determine what materials and services, the department, school or college currently uses
   • - Review budgets, business plan and historical spend; determine if there are new or changing needs
   • - Prioritize needs based on: Must have (essential), Need (necessary), or Want (nice to have but not necessary

Analyze and Segment

1. Determine any significant issues with current supplier base and whether they can be resolved
2. Determine if new suppliers are needed
3. Determine optimum supplier base to meet spending plan and budgets

Develop Plan

1. Establish a comprehensive sourcing plan taking into account capital objectives and operating budgets, supplier base, and leveraging and negotiating strategies
2. Adjust and revisit annually or more frequently depending on changes in business, market or supply conditions
3. Commodity Councils develop both commodity and service level sourcing strategies:
   • - Either converge suppliers – in which case they will activate the supplier convergence process and/or
   • - Add suppliers – in which case they will activate the supplier qualification process
4. Develop the comprehensive sourcing plan using the leveraged commodity and sourcing strategies and business-specific sourcing strategies
5. Define metrics that can be used to ensure the sourcing plan is effective
6. Negotiate sourcing agreements as needed to support the comprehensive sourcing plan
7. Modify sourcing plan as needed based on results of negotiations

Implement and Manage

1. Communicate the sourcing plan
2. Implement the sourcing plan
3. Implement the process to manage the supplier base. Select key strategic and/or leveraged suppliers
4. Place orders for supplies and services as negotiated

Audit, Reward or Remove

1. Ensure that sourcing plan objectives are being met
2. Recognize suppliers contributions
   • - Recognize outstanding suppliers with an increased share of Boston University business
3. Take appropriate action on supplier performance problems
   • - Punish suppliers that are performing badly by either reducing their business or replacing the supplier in total

Continuous Improvement

1. Commodity Councils work with suppliers to make continual and step change improvements in cost, quality and services