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What Are the Seven Steps to a Successful Strategic Sourcing Process?
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Mar 10, 2025
Finding the right suppliers is one of the biggest challenges in the supply chain. A seven-step strategic sourcing strategy can help businesses streamline procurement and ensure long-term success. By following each step, companies can improve efficiency and make smarter sourcing decisions. š§ Watch now and learn how this process can benefit your business! š Read more about the Seven-Step Strategic Sourcing Process Explained: https://mondoro.com/seven-step-strategic-sourcing-process-explained/ #MondoroCompanyLimited #SupplyChain #StrategicSourcing #Procurement #BusinessSuccess #SourcingStrategy #Manufacturing #Logistics To find out more great content about creating, developing and manufacturing home decor and home furniture products in Asia, check out our website at https://mondoro.com/
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0:01
hi this is Anita from the global trade
0:04
gal podcast or from manduro decom today
0:08
we're going to talk a little bit about
0:09
strategic sourcing and in particular the
0:12
seven step strategic sourcing process
0:15
you know whenever you're looking to
0:17
Source it's always best that you try to
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have a strategy in your sourcing so
0:21
there are seven steps that have been
0:23
made that help us to be able to
0:24
strategically look at how we want to
0:27
source and what you want to source and
0:29
why you need to buy the product So today
0:31
we're going to go through each of these
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seven steps so hopefully when you're
0:35
looking to purchase a product whether
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it's from overseas or whether it's
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locally or wherever you're just trying
0:40
to look for one that you may look at
0:42
these seven steps and you may work
0:44
through these seven steps before you
0:47
actually purchase the product the first
0:49
step is to identify what you will Source
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you know it may seem like this is very
0:54
simple of course I know what I want to
0:56
buy I want to buy a widget well this is
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more than just that this is for you to
1:00
really understand what are the product
1:03
specifications what exactly do you need
1:05
for this product what kind of quantity
1:07
do you need what size do you need do you
1:10
have any other specifications that you
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need the next would be you look at you
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know also in this was how are you going
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to use the product is it something
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you're going to use in your
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manufacturing is it something you're
1:22
going to purchase frequently or is it
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kind of a one-off purchase the next
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would be the volume how many pieces do
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you need to buy do you need just buy one
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piece or you going to buy two items are
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you're going to buy thousands of items
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you're going to buy millions of items
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these are all different things that you
1:36
need to look throughout the entire
1:39
sourcing process first you need to
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identify what you're going to source and
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why you're going to Source it you know
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I'm surprised and having been worked in
1:48
trade for a long time of how many
1:50
companies really don't do this like well
1:51
I want to buy a basket well what kind of
1:53
basket well I I don't know I don't have
1:55
an idea I think it needs to be brown
1:56
well what kind of brown basket well I I
1:58
don't know just a Brown basket and you
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know it makes it so much easier if
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somebody's already really identified
2:04
what they're going to need well how many
2:05
you going to buy well I don't know what
2:06
I'm going to buy maybe I'll buy 100
2:07
pieces or maybe I'll buy a thousand
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pieces I don't know but if you really
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have this identified this is going to
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help you throughout the entire sourcing
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process you're going to really know and
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understand exactly what you need to buy
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why you need to buy it what kind of
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quantity you need to buy it and the
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quality step two is you analyze your
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market supply you know analyzing your
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Market will help you clearly understand
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your market supply it will make a
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difference in your entire sourcing
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strategy we have seen with many of the
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recent um bottlenecks in supply chain
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that you know many people didn't really
2:38
analyze this for their overseas you know
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they may may not have really taken into
2:42
account that the supply chain could
2:44
bottleneck like this and ended up in
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trouble you know this is why now today
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especially with the way the supply chain
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is you look at do you buy it locally do
2:51
you buy it overseas will you do you need
2:54
to have it in a timely manner um you
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know will you you purchase it by air
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what do you need need to do there's a
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really simple Matrix which was done in
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1983 and it's by a a Peter um Crow I
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hope I I hope I said his name right and
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he basically talks about different
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critical areas like you should look at
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um you know what are the non-critical
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items what are the leverage items
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strategic items and bottleneck items and
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if you go on to my uh blog I will put a
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link for you here you can be able to see
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this Matrix that he did where it's
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basically it it helps you to be able to
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look at and analyze what's your market
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supply and where you are with this
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market supply you know some things that
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should be looked at with this market
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supply is your risks you know um you
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know what are the risks involved if you
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bring it in from overseas what are the
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risks involved are there going to be
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container shortages delays if there's a
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delay will this hurt your entire supply
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chain what's the profitability you need
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to look at what's going to be the bottom
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line you know if you buy it locally
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maybe you can't afford it it's going to
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kill your bottom line maybe you need to
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bring it overse bring it in from
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overseas so this is this Matrix that's
4:04
done can help you to be able to look at
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all these things and analyze it right
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here in step two before you've even
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contacted any supplier you know there's
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nowhere here now where we contacted any
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supplier we are still looking at your
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needs and what you need to do before you
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Source the product the next step three
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once you know exactly what you're going
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to Source how you're going to Source it
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where you need to Source it and you have
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kind of some some kind of idea as to the
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quantity you need the quality you need
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need then you start look developing your
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sourcing strategy in this phase you
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begin to look at your overall business
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goals what are your minimum requirements
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you need for the product the commodity
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or the sourcing supplier you can then
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list several essential criteria you know
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does your company require that the
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factory if it's from overseas do they
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need to pass an audit if they need to
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pass an audit then it begins to limit
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you maybe on who you can exactly buy
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from do they need to have an ISO
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certification you have to know and
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understand all of these things to
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identify who do you need to Target and
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why do you Target them so this is you're
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already up to step three of the seven
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steps and now is where you start the
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sourcing process I really love about
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this is that before you've even started
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doing the sourcing you already have an
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idea of what you need like you've
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already gone through step one two and
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step three so you've already developed
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your strategy and now you're getting to
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the part where you're going to start the
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actual sourcing process you'll notice
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that these first three steps no one was
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contacted now you're going to start
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saying who do I need to contact what are
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my potential suppliers it's where you
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start begin looking at what is my ideal
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supplier what is kind of the person I
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need well Source this product from and
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then now you start getting information
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from the suppliers so you start
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negotiate with them this is where you
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begin the negotiation phase you make a
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final decision who you're going to buy
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the product from and why the negotiation
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could be for the volume the quantity the
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price the packaging or other things you
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need for the actual product or commodity
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studying those aspects of the
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development will ensure that you'll be
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getting the product at the Quality the
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quantity and the price that you expect
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and want and with the delivery that you
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want step six is now you've you know
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you've been negotiating with the
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supplier you're kind of an idea you
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begin to integrate and Implement your
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supplier into your supply chain in other
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words you make them a stakeholder in
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your company this is where it's very
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important is that you you know it's you
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want the supplier to be like a
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stakeholder because if they're
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stakeholder then it's somebody that you
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buy from time and time and time again
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it's going to make your life easier and
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they're going to be happier too and so
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you're going to be working with somebody
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you look upon to say it's going to be a
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longterm relationship we want you to
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become a stakeholder with us many people
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sort of ignore this step six they feel
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like suppliers should understand all the
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requirements they should understand
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everything they should all be laid out
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for them that somehow the the supplier
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should already have an understanding of
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things but if you are buying from
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overseas the chances are that you're Al
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dealing with language issues what you
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might say to them and think that they
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understand may not be exactly the same
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as what you understand so it's very
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important that you go through the proper
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implementation and integration and you
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really try to integrate them as a
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stakeholder and step seven is also a
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step that many people Skip and this is
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where you give your supplier or the
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person that you're working with you give
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them benchmarks you help them understand
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here's the standards here's what we need
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this is for you to be successful you
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want to become one of our stakeholders
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here's what you need to do to become a
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stakeholder a good company will do all
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this to ensure that there will be
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success throughout the entire supply
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chain and with their supplier you know
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this seven-step um sourcing process I
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really love it because it's a way for
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companies to methodically go through
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each one of these steps and to know what
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they're going to buy why they're going
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to buy it what volume they're going to
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buy it and they're going to be able to
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see all of these different things along
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the way and why they want to and need to
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buy these things so if you are looking
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to Source a product whatever the product
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is go through these seven steps it will
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help you to really see where you need to
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be with your sourcing and why you need
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to be there you will understand then why
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strategic sourcing is such an important
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part of sourcing today thank you so much
8:20
for listening we hope you've enjoyed
8:22
this um global trade
8:25
gal podcast and please do subscribe and
8:28
check out our
8:30
blog and our other information on m.com
8:33
we'll put a link below so that you can
8:34
be able to find it also we have a Blog
8:37
about this which is called the seven um
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Step strategic sourcing process
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explained and we'll also give you a link
8:44
for that so that if you want to go back
8:46
and see the Matrix and some other
8:48
information you can also find it on that
8:50
blog please do tell your friends about
8:52
us we'd love to hear from you if you
8:54
have any questions or comments please do
8:57
let us know thank you so much for
8:59
listening listening this podcast is
9:01
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