Written by Marijn Overvest | Reviewed by Sjoerd Goedhart | Fact Checked by Ruud Emonds | Our editorial policy
Strategic Sourcing Case Studies 2025 — 10 Real-World Insights
What are strategic sourcing case studies?
- Strategic sourcing case studies are real-world examples that highlight how organizations optimize their procurement processes to drive long-term value.
- They showcase how companies align sourcing strategies with business goals, manage supplier relationships, and reduce total cost of ownership.
- These case studies reveal the importance of data-driven decisions, cross-functional collaboration, and risk mitigation in achieving sourcing success.
Strategic sourcing case studies are helpful to draw inspiration from as they offer real-life examples of procurement decisions, supplier strategies, and cost optimization methods, allowing you to learn from how others approach long-term sourcing success.
For this article, we will explore ten strategic sourcing case studies that can give you insight into how organizations align their sourcing strategies with business goals. Let’s start!
Example 1 — Delta Air Lines’ Cost-Efficient Sourcing Strategy
Actual Case:
Delta Air Lines faced significant financial difficulties in the early 2000s, struggling with adaptability and cost-efficiency. Between 2001 and the second quarter of 2004, Delta reported over $5.6 billion in losses. While the immediate trigger for these losses was not solely sourcing-related, Delta’s historically high operating costs and labor expenses contributed significantly to the rapid depletion of cash reserves. Analysts at the time also pointed to substantial pension fund obligations as a major factor exacerbating these losses.
Moreover, the airline found itself in dire need of a robust restructuring program, particularly due to the sharp increase in fuel prices during the early 2000s. Addressing Delta’s procurement spend became a critical component of its cost-cutting initiatives. Consequently, Delta Air Lines was compelled to reassess its operational functions to adapt and compete effectively.
In the years that followed, and increasingly so in the 2010s, Delta also had to adapt to growing industry-wide concerns regarding sustainability, climate change, and ESG (Environmental, Social, and Governance) practices. With competitors, including American Airlines and Etihad, progressively integrating ESG principles into their operations, Delta Air Lines recognized the imperative to enhance the sustainability performance of its supply chain.
Final Deal:
As one of the oldest and largest airlines in the United States, Delta Air Lines today employs a multidimensional, strategic approach to sourcing, leveraging robust demand planning and inventory management. Delta Air Lines’ strategies for sourcing and procurement now comprehensively integrate ethical labor practices, cost-efficiency initiatives, and sustainable methods.
Its widely recognized subsidiary, Delta Material Services (DMS), plays a crucial role in acquiring materials, coordinating inventory exchange deals, and managing a fleet of leased engines sourced from a diverse, international supplier pool. DMS enables Delta Air Lines to source its materials both strategically and sustainably by acquiring materials through channels that are not only cost-effective but also enhance Delta’s responsiveness to potential disruptions.
In 2015, Delta Air Lines launched a comprehensive procurement transformation program designed to streamline its sourcing and procurement operations and enable the automation of various processes. Furthermore, Delta actively collaborated with its suppliers to build positive, resilient relationships that helped the airline reduce costs and maximize efficiency. This program, initiated in 2015, reportedly resulted in over $2 billion in cost savings within five years and an impressive 20% reduction in overall procurement spend.
What We Can Learn From It:
Companies, along with their procurement teams, can benefit significantly from strategic sourcing in multiple ways. As demonstrated by Delta Air Lines, the integration of ethical labor, sustainability, cost-efficiency, and strong supplier relationship management is a crucial component of a successful strategic sourcing framework.
Moreover, streamlining procurement processes through automation and proactive supplier collaboration can substantially benefit companies by reducing overhead costs and achieving significant savings, all without compromising the quality of operations.
Example 2 — Starbucks Corporation Creating The C.A.F.E. Program
Actual Case:
In the 1990s, significant growth in the specialty coffee industry was seen, likely due to the increased coffee-drinking habits of college students and professionals. The price of coffee dropped globally due to the oversupply of low-grade coffee, which resulted in farmers suffering from low or negative profits.
Apart from this, the rise of competitors like Dunkin’ Donuts and McDonald’s, combined with instant coffee products becoming increasingly affordable in the early 2000s, signaled a challenge for Starbucks to stay resilient.
The price drop seen in coffee beans in the late 1990s and early 2000s posed a problem for Starbucks because they needed a steady supply of high-quality coffee that not only met their needs but also enabled equitable and sustainable agricultural practices.
Final Deal:
Starbucks introduced its strategic sourcing program, Coffee and Farmer Equity (C.A.F.E.) Practices, in 2004. This program indicates strict guidelines and sets of standards for how to manage partnerships with its suppliers and coffee farmers. This program ensures product quality, ethical practices, sustainability, and economic transparency.
Starbucks’ strategic sourcing program includes harnessing international sourcing to procure coffee beans from diverse suppliers to ensure not only fresh beans but also high quality while aiming for equitable costs.
Furthermore, Starbucks implements enterprise resource planning (ERP) systems that allow the company to track inventory levels and manage demand. Starbucks’ strategies for sourcing and procurement involve building partnerships with suppliers all over Asia, America, and Latin America. By traveling to meet agents and visit their plants and factories, Starbucks can build strategic relationships with international suppliers.
What We Can Learn From It:
Modern developments, combined with changing consumer preferences, present several challenges for companies like Starbucks, whose brand is renowned for specialty products. These challenges stem from the rise of instant products and more affordable products from competitors, which are ideal for everyday consumers.
However challenging it may be to navigate modern developments, a proactive perspective can translate into powerful results. Strategic sourcing is comprised of ESG efforts and optimization of processes, and implementing programs for strategic sourcing can set that plan in motion.
Implementing enterprise resource planning (ERP) systems benefits not only your ability to manage inventory and address demand but also positively impacts how business partnerships are built.
Example 3 — General Mills
Actual Case:
General Mills markets several well-known brands, including Pillsbury, Betty Crocker, and Häagen-Dazs. One of the most significant challenges faced by General Mills is material disruptions caused by labor shortages. In the first quarter of 2022, General Mills experienced a demand-supply imbalance, presenting a complex challenge for sourcing its materials and raw ingredients.
Its supply of oils and starch was effectively compromised when the producer price index increased by 46.2% YoY for fats and oils and 70.1% for wheat. Cost increases associated with labor, transportation, ingredients, and packaging also signaled higher input costs, meaning that General Mills’ customers would have to pay more for products.
Final Deal:
When General Mills added Tier 1 suppliers in North America and expanded its supplier base to Asia, Latin America, Europe, and Australia in 2021, it created a positive impact on the company’s sourcing strategy by enabling its teams to mitigate risks associated with product freshness and quality, packaging durability, and more.
Today, General Mills is working to reformulate products to manage sourcing challenges and keep its brands on the shelves. Despite the lack of growth in previous fiscal quarters, General Mills reported a profit of $660 million between December 2021 and February 2022, which is 11% more than the previous year.
What We Can Learn From It:
Diversifying the supply base can help address the challenges associated with sourcing and procurement, including supply shortages, material disruptions, cost increases, and others. Pricing fluctuations are inevitable, but organizations can prepare themselves for such events by exploring sourcing alternatives such as global sourcing.
Companies should always explore alternatives that better equip them to handle sudden disruptions and shortages. Having an alternative supply source and suppliers in better positions enables organizations to address spikes in production costs and supply chain disruptions.
Example 4 — IKEA’s international sourcing strategy
Actual Case:
IKEA, a Swedish home decor giant, faces a number of challenges related to customer preferences, logistics, and supply chain expenses. Over the years, consumer behavior has showcased a remarkable shift in preferences leaning toward sustainability and affordable yet high-quality products.
In the context of its supply chain, IKEA confronts setbacks in reducing costs while maintaining quality. Low-cost production from manufacturing plants in China and India poses challenges because of high transportation costs and gaps in design expertise. From an ESG perspective, relying on low-cost manufacturing presents a challenge for IKEA as evolving consumer preferences for sustainability and ethical labor practices include sourcing, production, and product life cycles.
Final Deal:
IKEA is known for its commitment to making processes more efficient in economic, sustainability, and automation efforts. IKEA’s strategic sourcing efforts involve global sourcing that focuses on cost-efficient alternatives that benefit people and the planet.
With sourcing channels in 54 countries worldwide, IKEA combined local sourcing with global sourcing, resulting in lower total costs. This strategic approach to sourcing empowers IKEA to source raw materials in a way that allows it to leverage the economic benefits of its sourcing strategy while remaining environmentally conscious.
Today, IKEA’s People & Planet Positive highlights three focus areas: promoting healthy and sustainable living, becoming circular and climate-positive, and respecting fairness and equality in all areas of its business. In FY21, IKEA achieved its sustainable sourcing objective, which meant that 98% of the wood used in its products is FSC-certified and recycled.
What We Can Learn From It:
International sourcing presents both pros and cons; it allows companies to leverage global expertise, but it falls short when it comes to transportation costs and ethical labor practices. By combining local sourcing and global sourcing with a sustainable sourcing strategy, companies can ensure that their products are manufactured ethically at lower transportation costs.
Strategic sourcing that centers on ethical and sustainable sourcing allows companies to maintain efficiency in the supply chain while upholding values that benefit both people and the planet.
Example 5 — Toyota’s just-in-time production methods
Actual Case:
Toyota began reevaluating its approach to supply chain risk management in the wake of the financial crash in 2008, which led to the bankruptcy of many automotive suppliers. The 2011 Fukushima disaster revealed the ripple effects of the disruptions between tier-one suppliers and small suppliers, which prompted Toyota’s suppliers to disclose their sources for car parts and components.
In 2016, Toyota had to recall over 5.8 million vehicles from worldwide markets due to the faulty installation of airbag inflators manufactured by Takata. A strategic issue emerged when US authorities discovered this defect in more than 50% of airbags, including those used as replacement parts after a 2010 recall. This defect was seen in some of Toyota’s bestselling models, such as Corolla, Vitz, and Yaris.
This challenge was primarily caused by a lack of management and insufficient quality screenings, which urged Toyota to look into its sourcing strategy as well as its supply chain functions. Since the recall of vehicles in 2016, consumers shifted their attention to other car brands available in the market.
Final Deal:
Today, Toyota is one of the largest and most successful car manufacturers in the world. Known for the quality and extreme durability of its vehicles, Toyota also boasts just-in-time inventory, production, and strategic sourcing methods that enable the Japanese carmaker to ensure the quality of its parts and materials while minimizing waste and excess stock.
Toyota’s sourcing strategy includes the globalization of its supply chain to leverage cost savings and economies of scale without sacrificing quality. In addition to this, Toyota implemented RFID systems to track and manage its supply chain, which ensures a consistent supply of high-quality components. Furthermore, Toyota values its supplier relationships, allowing them to maintain mutually beneficial connections while ensuring that all sourced materials meet quality standards.
While Toyota has seen its fair share of supply chain disruptions alongside its US dealers, those disruptions were managed in a way that positioned the carmaker to outperform its competitors. This strategic approach to supply chain risk management and procurement motivated Toyota’s success in implementing a better sourcing strategy.
What We Can Learn From It:
Ignoring supply chain risks can only land businesses in disaster. Toyota’s proactivity in managing supply chain disruptions has better positioned the carmaker to predict and address risks in sourcing, procurement, and various supply chain functions.
Meanwhile, just-in-time inventory is crucial for streamlining production processes and minimizing excess stock. Ultimately, just-in-time inventory is a strategy many adopt to help optimize inventory management and improve the efficiency of production processes.
Example 6 — Johnson & Johnson’s supply chain compliance
Actual Case:
In early 2020, the COVID-19 outbreak rapidly escalated into a global pandemic, profoundly impacting supply chains worldwide. This presented a significant challenge for many companies, including Johnson & Johnson, particularly in maintaining the reliable supply and distribution of essential pharmaceuticals and medical devices.
The pandemic severely disrupted traditional sourcing channels, logistics networks, and manufacturing operations, demanding an exceptionally agile and resilient response to ensure continued product availability and compliance with evolving global health regulations.
Final Deal:
Johnson & Johnson, a multinational pharmaceuticals and medical devices company renowned for its early adoption of strategic sourcing, was remarkably well-positioned to address these unprecedented challenges. Johnson & Johnson had previously introduced digital technologies into its enterprise-wide processes and established ‘future-ready procurement,’ which entailed digitizing operations to enhance their procurement and sourcing processes.
This foresight allowed them to leverage these robust digital capabilities to quickly adapt to the pandemic’s disruptions. By enhancing visibility across its complex supply chain through tools like real-time tracking and advanced analytics, and enabling more flexible sourcing strategies, Johnson & Johnson was able to navigate the crisis, maintain compliance with stringent regulations, and ensure the continued supply of critical products like Tylenol and, eventually, their COVID-19 vaccine candidate.
Thus, digital enablement allowed Johnson & Johnson to drive value and create resilience through successful strategic sourcing, proving crucial during the unprecedented supply chain pressures of the COVID-19 pandemic.
What We Can Learn From It:
Johnson’s proactive shift to digital procurement, initiated well before the pandemic, significantly helped the company better adapt to disruptions and uncertainties in sourcing, procurement, and supply chain operations.
At the core of this shift is adaptability, powered by technologies like AI, advanced analytics, and cloud platforms. These tools allow faster responses through real-time insights, enabling companies to predict and react to disruptions more effectively.
Strategic sourcing also plays a key role, focusing on long-term planning, fostering strong supplier relationships, and implementing robust risk management frameworks.
In the end, digital procurement isn’t just about efficiency; it’s about building smarter, more transparent, and more reliable supply chains that can withstand and thrive amidst future disruptions.
Example 7 — Nestlé’s sustainable and economic sourcing strategy
Actual Case:
Nestlé confronts challenges in sourcing 100% deforestation-free soy, with responsible sourcing lead Madeleine Eilert citing complex supply networks and legal disputes related to the conversion of cropland as the key challenges in Nestlé’s sourcing strategy. Nestlé’s goal involves creating a supply chain that is 100% deforestation-free, but supply chain complexities may not allow them to have direct contact with farmers.
When it comes to sustainability objectives, Nestlé’s initiatives include achieving a deforestation-free supply chain and reducing its use of virgin plastic packaging by one-third with a 2025 deadline. Nestlé’s commitment to responsible soya sourcing was developed with the Round Table on Responsible Sourcing (RTRS) standard in mind. However, not all suppliers are committed to the same initiative.
Final Deal:
The four pillars of Nestlé’s sourcing strategy are the following: quality, efficiency, responsiveness, and sustainability. With this in mind, Nestlé’s Farmer Connect initiative is defined by sustainable agriculture practices that aim for greener sourcing connections as well as the economic stability of their farmers.
This strategic sourcing approach enables Nestlé to implement responsible sourcing through sustainability initiatives while leveraging the benefits of lower overall costs of sustainable agriculture. Furthermore, Nestlé’s purchasing process aligns with its business strategy, which includes efforts that aim for cost-efficiency and sustainability.
In recent years, Nestlé has demonstrated its progress in responsible sourcing by reducing its carbon footprint. In 2022, Nestlé significantly reduced the weight of its product packaging by 200,000 tonnes and reduced its greenhouse gas emissions by 280,000 tonnes. In that same year, Nestlé’s overall packaging footprint decreased significantly, from 4.7 million metric tons in 2018 to 3.6 million metric tons in 2022.
Furthermore, Nestlé’s strategic sourcing methods include testing, sourcing, packaging, alternatives, and following its own Responsible Sourcing Standard. In 2022, Nestlé’s progress included 22% of key ingredients meeting its produced sustainably indicator and 71.7% cage-free eggs from global suppliers.
What We Can Learn From It:
Responsible sourcing should be a priority for all organizations, procurement teams, and suppliers. Apart from building a socially responsible supply chain, it also provides benefits for the planet by fostering a culture of ethical procurement practices.
As changing consumer preferences gravitate toward sustainability and social responsibility, companies must adapt to be truly successful. Responsible sourcing is crucial for achieving strategic sourcing as it leverages ESG initiatives for the benefit of all individuals and the environment while creating a positive brand image.
Example 8 — Walmart’s supply chain management and vendor-managed inventory amid the COVID-19 pandemic
Actual Case:
As one of the world’s largest retailers, Walmart faced a sudden challenge when the COVID-19 pandemic disrupted global supply chains. Its inventory management teams faced several dilemmas related to irregular demand patterns and abrupt changes in consumer behavior, leading to supply chain disruptions and inventory imbalances.
With the onset of the pandemic, many suppliers faced factory shutdowns, reduced manufacturing capacities, and transportation delays. This was primarily due to the sudden shortage in the workforce and lockdown regulations imposed in 2020. Moreover, the demand for essential products increased exponentially, leading to supply shortages and challenges in inventory management.
This sudden increase in demand posed a challenge for Walmart’s supplier base, as it led to a surge in orders for essential products from consumers and other large retailers. Ultimately, the increased demand for essential products, inventory imbalances, and supply chain disruptions signaled Walmart’s realization of harnessing technology and supplier diversity to aid its operations.
Final Deal:
Today, Walmart employs direct sourcing, which entails vendor-managed inventory, meaning that suppliers are responsible for managing their inventory. This enables Walmart to reduce costs both for itself and its customer base while maintaining good supplier relationships.
Also under Walmart, the Responsible Sourcing Academy’s purpose is to provide training and resources to Walmart’s suppliers on audit guidance, health and safety, and supply chain functions.
To keep up with the surge in consumer demands, Walmart created a system that combined analytics with tracking purchasing patterns. Furthermore, Walmart shifted its focus toward increasing its use of analytics and investing in both AI and machine learning. By investing in the development of artificial intelligence, Walmart can anticipate demands and become better equipped to address consumer preferences and standards.
What We Can Learn From It:
During times of crisis, strategic sourcing can be employed in several ways to minimize the negative impacts of crises like pandemics and natural disasters. Notably, AI emerges as a powerful tool that can assist procurement teams in navigating complex supply chains, demand surges, inventory challenges, and more.
It is important that companies harness technology such as AI and machine learning to be truly modernized. In procurement and sourcing, crises and disruptions of different kinds are inevitable. However, organizations can navigate these challenges and become successful by harnessing the power of artificial intelligence to help optimize and even automate processes.
Example 9 — Hershey’s Cocoa For Good strategy maintains good relationships with farmers and suppliers
Actual Case:
Over the years, sustainability has become an increasingly prevalent concern among companies, investors, and consumers. For The Hershey Company, this presents benefits as well as challenges. The benefits involve better ESG performance and a better brand image, while the main challenge is making sure the supply chain is 100% sustainable while remaining cost-efficient.
Chocolate and other cocoa products are some of the most common ingredients in confectionery treats. However, farming a sustainable cocoa crop has its challenges. Cocoa trees grow in very few countries close to the equator, where temperatures are warm and humid. Côte d’Ivoire and Ghana are responsible for sourcing a majority of the chocolate that is used to produce confectionery products in America.
An overwhelming majority of The Hershey Company’s products are made with chocolate. Without a steady supply of cocoa that is responsibly sourced, The Hershey Company needs to come up with a strategy for ensuring a consistent supply of cocoa while ensuring its sourcing practices align with ESG standards.
Final Deal:
Hershey combines sustainability with strategic sourcing. The confectionery manufacturer’s Responsible Sourcing Strategy centers on four main areas: fostering sustainable agricultural communities, responsibly sourcing raw ingredients, promoting a transparent supply chain, and providing training to achieve its sustainability objectives.
In 2018, The Hershey Company launched its Cocoa For Good strategy—an initiative to ensure that all cocoa is farmed and sourced sustainably. This strategy highlights protecting the well-being and rights of farmers and building relationships with sustainable suppliers. Furthermore, the multinational confectionery company aims to invest half a billion dollars by 2030 to improve livelihoods, protect children’s rights, and promote sustainability.
What We Can Learn From It:
Responsible sourcing and supplier relationship management are indispensable aspects of strategic sourcing. Without sustainability and CSR transparency, there’s no way for companies to be held accountable for their sourcing practices. Meanwhile, supplier relationship management is crucial for ensuring that supply chains commit to ethical and sustainable sourcing.
Sustainability has become increasingly important for both companies and consumers, and it comes with several risks and challenges. However, creating a sustainable supply chain is mutually beneficial for organizations, their suppliers, and the environment. It offers benefits ranging from cost-efficiency, improved brand image, strong ESG performance, and stakeholder engagement.
Example 10 — Nike’s “China+1” Strategy and AI-Driven Sourcing Amid Rising Trade Tensions
Actual Case:
Over the past years, Nike has experienced an increasing complexity in its purchasing and production processes. The lingering trade uncertainties between the American and Chinese governments made things quite uncertain, especially since some products made in China incurred higher costs of imports through tariffs. Although the rumors that a tariff rate of 62% on all imported footwear and footwear products from China and Vietnam are erroneous, some product groups are subject to high tariffs.
This gives rise to a problem for Nike due to its production footprint. This fiscal year, the shoe manufacturer manufactured around 50 percent of its shoes in Vietnam, and the rest were made in China although there has been a fall in this percentage when it comes to the products exported to the U.S. These are the dependencies that make Nike particularly sensitive to any change in geopolitics as well as trade policies.
On top of the tariffs, the company has to deal with the growing labor costs in established manufacturing hubs in Asia and a radical change in buyer habits, migrating in large numbers to online and direct-to-consumer platforms. All these have compelled Nike to engage in an entirely new review of its global supply chain strategy. In order to overcome these challenges and satisfy the emerging demands of the marketplace, the company has perceived that it needs to improve the resilience of its operations, improve its agility, as well as optimize its costs.
Final Deal:
In order to strategically overcome these obstacles, Nike carried out a comprehensive transformation of its sourcing strategy. The company started by decreasing its reliance on China, where its production was reduced by almost 50 percent to only 18 percent of its total output.
It has concentrated its production in Indonesia and also increased its production in Mexico to the advantage of the trade-friendly USMCA agreement. Nike has also made a huge investment in automation and artificial intelligence in Southeast Asian manufacturing plants.
AI and robotics served to mitigate the effects of the increased prices of people and made production more accurate and faster at the same time. These technologies also helped Nike improve demand forecasting, thus enabling them to have stock management. Besides, Nike also reinforced its direct-to-consumer platforms, such as the Nike app, Nike e-commerce, and Nike stores.
As a facilitator of this transition, the company redesigned its logistics processes by opening automated regional delivery centers to achieve a time and cost-effective process of delivering the products to customers within the various markets.
What We Can Learn From It:
The strategy of Nike indicates the role that strategic sourcing can play to safeguard the functioning of firms and even give them a competitive advantage in the case of disruption. The more countries Nike sourced suppliers the less tariff and political risk exposure it had.
Automation and AI turned out to be pivotal decisions to make, as they helped the company to be agile, sustain the quality of the products, and control the costs.
The merger between sourcing and direct-to-consumer approach also portrayed how customer satisfaction with a brand and supply chain decisions have a direct relationship with each other.
All in all, the solution of Nike helps us recall that contemporary sourcing needs to embrace resilience, technological, and long-term agility of operations as factors of success.
Conclusion
Strategic sourcing plays a critical role in helping both startups and large corporations improve efficiency, manage supply chains, leverage economies of scale, and operate with sustainability and ethics in mind.
For organizations looking to adopt strategic sourcing, it’s important to conduct thorough planning and research to determine which strategies best align with their procurement needs.
The case studies featured here highlight how effective strategic sourcing can enhance supply chain performance, strengthen supplier relationships, and support ESG goals.
Frequentlyasked questions
What are strategic sourcing case studies?
Strategic sourcing case studies are real-world examples that highlight how organizations optimize their procurement processes to drive long-term value. They offer lessons from actual companies on aligning sourcing strategies with long-term business goals.
Why should procurement professionals study strategic sourcing case studies?
Studying case studies helps procurement professionals understand practical applications of sourcing theories, identify industry best practices, and avoid common pitfalls. They provide actionable insights into how others solved challenges in procurement and supply chain management.
How does strategic sourcing differ from traditional procurement?
Strategic sourcing focuses on long-term value, total cost of ownership, and supplier partnerships, whereas traditional procurement often emphasizes short-term cost savings and transactional efficiency. The case studies in this article reflect this shift toward a more strategic, value-driven approach.
About the author
My name is Marijn Overvest, I’m the founder of Procurement Tactics. I have a deep passion for procurement, and I’ve upskilled over 200 procurement teams from all over the world. When I’m not working, I love running and cycling.
