Sourcing and supply chain strategy - Essay Example

Often, strategies that have been already tested in practice are preferred, as they can ensure the limitation of risks involved. Similar approaches are used in modern organizations when having to manage organizational sources. In this case, two different concepts appear: the sourcing strategy and the supply chain strategy. The above two frameworks, even if they seem identical, they refer to different organizational needs. Of course, as all organizational strategies, the outsourcing strategy and the supply chain strategy have a common target: to provide to the organization a competitive advantage towards its rivals (Weele 2009).

The relationship between the sourcing strategy and the supply strategy is explored in this study. Reference is made to the elements of these strategies, their requirements and their key processes. Particular emphasis is given on the parts of supply chain strategy, since the particular strategy is extensively used in modern organizations, having the power to significantly support organizational growth. At this point the following issue should be highlighted: the literature published in the particular field promotes different approaches for explaining the role and the structure of the outsourcing strategy and the supply chain strategy. . Then, the processes of each of the above strategy would be analysed using appropriate theories and examples so that the value and the implications of both these strategies to be made clear. 2.1.

1 Sourcing strategy The sourcing strategy, as the supply chain strategy, focuses on specific organizational needs. Patel (2005) note that ‘the sourcing strategy defines who will fulfil various parts of the objectives as defined by the business strategy’ (Patel 2005, p.43). At the next level, ‘the activity to which the above objectives are related can be a project or a process’ (Patel 2005, p.43). Thus, the role of outsourcing with modern organizations is quite specific: to respond to the needs of particular organizational initiatives, other internal or external, which have to be developed within a short or a long period of time.

From a similar point of view, Philippart et al. (2005) noted that the outsourcing strategy is used when having ‘to identify the strategies which will be used for sourcing the appropriate products and services’ (Philippart 2005, p.118). The potential role of outsourcing as one of the key business strategies is made clear through the following example: IBM and Dell, key competitors in the global electronics industry, have significantly decreased their costs by using outsourcing in regard ‘to their key commodities, such as memories and hard disks’ (Philippart et al 2005, p.118). In other words, if it is appropriately planned, outsourcing can help to the improvement of cost control in modern organizations, supporting the standardization of organizational performance.

In 2010, Walmart introduced a new sourcing strategy based on the following