Strategic Sourcing

Online Certification

Michigan State University

Course Overview

Instructor: Tobias Schoenherr

Course Description

Strategic sourcing enhances efficiency and value, ultimately impacting the profitability of your entire organization. In this essential course, you’ll learn how to develop and implement a procurement strategy that aligns with your overall competitive strategy.


Real business case studies and best practices provide practical applications you can use on the job immediately. As you progress through the course, you’ll acquire the key skills to negotiate effectively, structure your purchasing department, evaluate and select suppliers using an analytical hierarchy process, and manage cost across the entire supply chain.

Course Objectives 

After successfully completing this course, students will be able to:

  • Recognize and be able to assess key issues, principles, opportunities, strategies, techniques, and developments in strategic sourcing being pursued by leading-edge organizations to achieve competitive advantage

  • Identify and analyze the importance of developing a supply management strategy that is aligned with the firm’s overall competitive strategy, and understand internal and external challenges that affect sourcing strategy

  • Review the criteria and techniques for selecting new suppliers, and for assessing and evaluating existing suppliers, and understand how and when to build trust between participants across the supply chain

  • Outline and define issues involved in the make-or-buy decision, global sourcing, electronic procurement, the extended enterprise, negotiations, and ethics

  • Apply decision-making frameworks and problem-solving skills to determine the best course of action pertaining to above strategy areas

Students will meet the course objectives through the following actions:

  • Attending live lectures 

  • Completing learning content pages, which includes

    • Watching videos

    • Reading text and studying charts and tables

    • Listening to audio

  • Posting to the discussion board

  • Completing eight exams

Course Requirements


  • Internet connection (DSL, LAN, or cable connection desirable)

  • Access to Canvas

  • Microphone

  • Read content, watch videos, listen to audio, and complete assignments

  • Microsoft Excel

Course Structure

The content will be delivered in Canvas with a variety of media components. Students will need to play video, audio, and download Excel. They will also need to access video conference links for live lectures.

Course Outline/Schedule

Setting the Stage

  • Scope of strategic sourcing

  • Strategic sourcing’s importance and potential to drive competitive differentiation

  • Evolution of sourcing

  • Sourcing’s objectives and responsibilities

  • Current sourcing pressures and challenges

  • Cost-based to value-based procurement

  • Buyer-supplier relationship quality

  • Benefits of a balanced sourcing approach

  • How to build deep supplier relationships

Organizational Structure and the Purchasing Process

  • The importance of alignment with a firm

  • Information sharing

  • Centralized vs. decentralized structures

  • Drawbacks of measuring a buyer’s performance

  • Group Purchasing Organizations

  • Purchasing process and reasons why it had been neglected for so long

  • Potential of an IT-enabled purchase-to-pay (P2P) system

  • Best practices on how to best design and manage the purchasing process


Category Management

  • Rationale and importance of category management

  • Properties of a successful category strategy

  • Spend analysis

  • Purchasing portfolio analysis

  • Category strategy development process

Supplier Evaluation and Selection

  • Recognize that supplier selection is not a trivial undertaking

  • Criteria for supplier evaluation and selection

  • Four competitive priorities into supplier evaluation and selection

  • Appropriate supplier selection strategies for different supply chain designs

  • Application of the Analytic Hierarchy Process to the supplier selection problem

Negotiations, Legal Issues and Ethics ​

  • Negotiation strategies

  • PRAM model

  • Negotiation strategies based on “Getting to Yes”

  • Recognize various forms of power and the responsibility that comes with it

  • Laws of agency

  • Basics of contracting

  • Legislation impacting sourcing

  • Importance of ethics and how to ensure it in sourcing


Supplier Performance Management and Cost Management

  • The importance of performance management to drive supplier behavior

  • Importance of supplier site visits

  • Properties of good measures and measurement system characteristics

  • Performance rating methods

  • Communicating supplier performance via scorecards

  • Valuable lessons from quality management for supplier (performance) management

  • The power of cost and price analysis

  • Manage costs in new product development

  • Various cost management approaches

  • Supplier price and cost strategies


Risk Management and Global Sourcing

  • The importance of risk management

  • Approaches to risk management, including proactive and reactive strategies

  • The risk management process

  • Motivations and barriers to global sourcing

  • Strategies to overcome global sourcing challenges

  • Recognize the importance of culture

  • Benefits that international purchasing offices and other intermediaries can provide

  • Recognize critical success factors for global sourcing

  • Become familiar with contertrade approaches

Electronic Sourcing

  • Recognize the importance, potential and impact of electronic sourcing

  • Online reverse auctions

  • The help offered by third-party providers

  • The potential of blockchain, big data analytics, data visualization, and artificial intelligence and cognitive computing for strategic sourcing

Who Should Register?

This eight-week, 100% online course is ideal for procurement and sourcing professionals in any industry who are responsible for creating competitive environments and identifying cost savings opportunities. It is also a must for managers and executives who are responsible for supply chain processes and developing initiatives to support supply chain performance. Students may find it helpful to have some familiarity with the fundamentals of an integrated supply chain, which are covered in the Supply Chain Management I and II courses.