Aggressive Sourcing techniques are now being applied more widely and will predictably have a significant impact on supplier revenues. The focus of these activities (for example, by consolidating volumes and ‘re-specing’ purchases to reduce differentiation) is to move suppliers in to a space where the market and buyer muscle can be used to drive down prices.

There are three options that face suppliers squeezed into this space:

  • Innovate to re-establish their differentiation;
  • Change the balance of power in the customer and competitor mix (e.g., by acquiring competitors or by getting access to new groups of customers);
  • Work with clients in their sourcing activities to get the ‘win-win’ at the expense of the competition.

Whilst the first two options are more traditional, they will become more difficult to execute as clients deploy their Sourcing strategies to level the playing field. By understanding the insights that drive Sourcing, suppliers can develop anti-sourcing techniques that allow them come out together with the clients as the winners in a sourcing project: for example, with increased volumes, a greater market share and a better, more informed understanding of their clients.

Sixhills has a broad range of experience applicable in Sourcing and business-to-business relationships and can help suppliers to work with their clients to find the ‘win-win’.