• Purchases of outside goods and services can consume as much as 60% or more of a business' revenues.
  
  
• Approximatly 15-30% of these expenses are managed or monitored in many companies.
  
  
• A mere 10% reduction in outside purchasing can increase profitability from 20% or more.

The key to lower costs lies in the effective management of the supply chain. Strategic Sourcing is a structured way of approaching purchasing by leveraging the "Real" buying power of the company, focusing on actual business needs and becoming more informed buyers and is a process that can be adopted and being equally beneficial for buyers and suppliers alike.

The main objective is minimizing costs, but strategic sourcing takes an enlightened view of the supplier-customer relationship. Strategic sourcing recognizes that people, including innovative suppliers, are a valuable part of an organization and focuses on reducing waste or non-value-added costs. It is defined as: "A disciplined, systematic process for reducing the total costs of externally purchased materials, products and services while maintaining or improving levels of quality, service and technology."