Strategic sourcing involves leveraging UC and UC Merced’s overall spend with key, contracted suppliers. It also involves the time intense process of establishing contracts as a University -- as opposed to, for example, each department or school executing the process themselves.
Therefore, the goal of Strategic Sourcing is to save departments, schools, the University, and UC money, time, and resources.
Let’s explore other benefits to Strategic Sourcing as a discipline.
The leverage UC and UC Merced have to negotiate better prices, steeper discounts, free shipping, and other financial and business incentives increases as the spend on strategic contracts increases. This creates opportunity for our institution to demonstrate to competing suppliers the value of bidding on UC and UC Merced contracts!
Other benefits of Strategic Sourcing include:
- improved contract and supplier performance management.
- reduced procurement process costs -- through a reduction in the number of transactions that require a competitive bid process.
On another tack, while the “list price” of a given item offered to UC Merced by a given retailer may in fact be less in terms of dollar amount -- the actual purchase of the item at that “list price” we mentioned usually does not offer the lowest overall cost, or best value, for/to UC Merced.
This is because "hidden" (and often contracted) expenses, order quantities, annual quantities, and other issues may be at work as factors in the University's actual cost of the item purchased.
Therefore, ordering through Bobcat Buy as well as through our named Strategic Suppliers is the most efficient use of University resources and the best overall value for the university.
