Written by Marijn Overvest | Reviewed by Sjoerd Goedhart | Fact Checked by Ruud Emonds | Our editorial policy

3 Real-Life Examples of the Strategic Sourcing Process

1. Lufthansa Group

Lufthansa is a strong real-world example of strategic sourcing because it first focused on understanding its own spend data before making better sourcing decisions. According to McKinsey, Lufthansa had procurement data spread across 14 separate ERP applications, which made it hard to see detailed opportunities across the business. To solve that, the company worked to create a single, more transparent view of spend across its network. That gave Lufthansa a stronger foundation for supplier analysis, sourcing strategy, and decision-making.

After building that clearer view, Lufthansa used the data to support smarter supplier negotiations and reduce costs. McKinsey notes that the new setup created greater transparency across sourcing systems, simplified data integration, and helped inform negotiations with suppliers. The company also gained better visibility into price volatility and carbon emissions, which made procurement decisions more strategic rather than purely transactional. This is a good example of how strategic sourcing starts with data visibility and then moves into better supplier management and long-term value creation.

2. Starbucks

Starbucks provides a very practical example of strategic sourcing through its C.A.F.E. Practices program for coffee. Before doing business, Starbucks evaluates coffee quality and requires suppliers to provide economic transparency all the way down to the producer level. Suppliers then submit a formal application that maps the full supply chain and commits them to Starbucks’ sourcing guidelines. This shows how strategic sourcing goes beyond buying coffee at a low price and instead builds sourcing decisions around quality, transparency, and long-term supply security.

The process does not stop at supplier selection. Starbucks uses third-party organizations overseen by SCS Global Services to inspect farms, mills, and warehouses against more than 200 indicators, and approved supply chains must go through regular re-verification. Starbucks also says suppliers work on continuous improvement plans, and the company can suspend commercial relationships when zero-tolerance violations are found. This is a real example of a sourcing process that includes supplier screening, verification, performance monitoring, and corrective action over time.

3. Unilever

Unilever’s palm oil program is another clear real-life example of strategic sourcing in action. The company states that it has moved beyond simply buying from the existing certified supply base and has become more selective about which suppliers and sourcing areas it will work with. Unilever also embeds its People and Nature Policy into supplier contracts, with requirements linked to no deforestation, human rights, transparency, and traceability. That is a strong example of how sourcing strategy can be aligned with broader business and sustainability goals.

Unilever also shows the later steps of strategic sourcing by closely monitoring supplier performance and improving supplier integration. The company reports 95.7% deforestation-free in-scope palm volumes by the end of 2024, and says it uses independent verification, traceability technology, and reporting tools to monitor suppliers. It also reports 98% traceability to mill and plantation, supports more than 50 mills with training, and suspends suppliers linked to deforestation until improvements are made. This makes Unilever a strong example of strategic sourcing because it combines supplier selection, contract requirements, monitoring, risk management, and continuous improvement.

4 Benefits of Strategic Sourcing Process 

10 Best Practices of the Strategic Sourcing Process 

The strategic sourcing process delivers the best results when it is supported by clear rules, good data, and continuous improvement. By following proven best practices, companies can reduce costs, manage supplier risk more effectively, and build stronger long-term sourcing strategies.

1. Align sourcing with business goals

Strategic sourcing works best when it supports the company’s wider objectives, not just short-term savings. That means procurement decisions should reflect whether the business is focused on cost leadership, growth, resilience, innovation, or sustainability. When sourcing is tied to business strategy, it becomes easier to create value instead of simply buying at the lowest price.

2. Start with strong spend analysis

A good sourcing process begins with a clear view of where money is being spent and how suppliers are performing. Spend analysis helps companies identify cost patterns, hidden inefficiencies, and opportunities for better sourcing decisions. Without reliable spend data, it is much harder to negotiate well or improve supplier strategy.

3. Analyze the supply market before making decisions

Companies should study market conditions, supplier capabilities, competition, and external risks before choosing a sourcing approach. This helps procurement teams understand what is realistic, where leverage exists, and which risks may affect supply continuity. A strong market analysis leads to better timing, better supplier choices, and fewer surprises later.

4. Engage stakeholders early

Strategic sourcing is more effective when procurement works closely with internal stakeholders from the start. Finance, operations, technical teams, and leadership often have different priorities, so early alignment helps avoid delays and conflicting expectations. It also improves buy-in and makes the sourcing strategy easier to implement across the organization.

5. Build a category-based sourcing strategy

Instead of treating every purchase the same way, companies should group similar spend into categories and manage them strategically. A category-based approach helps teams define priorities, set measurable goals, and choose the best sourcing levers for each spend area. This creates more focus, better resource allocation, and stronger long-term results.

6. Evaluate total cost of ownership, not just price

The cheapest supplier is not always the best supplier. Total cost of ownership includes more than the purchase price, such as logistics, usage, maintenance, rework, risk, and end-of-life costs. Looking at full lifecycle cost helps companies make smarter sourcing decisions and avoid expensive trade-offs later.

7. Segment suppliers by value and risk

Not every supplier should be managed in the same way. Segmenting suppliers by spend, risk, strategic importance, and performance helps procurement teams decide where to collaborate closely and where to apply tighter controls. This makes supplier management more efficient and helps companies focus attention where it matters most.

8. Build collaborative supplier relationships

Strategic sourcing should not rely only on price pressure and tough negotiations. Strong supplier relationships can improve service, increase transparency, and create opportunities for joint problem-solving and innovation. A collaborative approach often delivers more long-term value than a purely transactional one.

9. Manage risk proactively and diversify where needed

A good sourcing process includes active risk management, not just supplier selection. CIPS highlights practices such as broader risk assessment, supplier diversification, and proactive steps to reduce disruptions. This helps companies protect continuity and stay more resilient when market conditions change.

10. Track performance and keep improving

Strategic sourcing should be treated as a continuous process, not a one-time event. Companies should use KPIs, supplier evaluation, and regular reviews to measure results and improve over time. Continuous monitoring helps procurement teams correct weak spots, maintain compliance, and turn sourcing into a stronger long-term capability.

Conclusion

Strategic sourcing is a structured process that helps companies make smarter purchasing decisions, reduce costs, and manage supplier-related risks more effectively. Through steps such as profiling, market analysis, strategy development, supplier selection, and performance review, organizations can create a more transparent and efficient sourcing system. This approach helps procurement move beyond routine buying and contribute more directly to business goals.

The value of strategic sourcing is also visible in practice, where companies use it to improve supplier management, strengthen resilience, and support long-term growth. Real-life examples show that successful sourcing depends on good data, clear processes, and continuous monitoring of results. When supported by best practices, strategic sourcing helps companies build stronger supplier relationships, improve performance, and create long-term value.

To support you in implementing these strategies, I have created a free-to-download editable procurement process: 7-step template. This resource includes an editable PowerPoint file and an Excel spreadsheet designed to enhance your strategic sourcing efforts. Additionally, I’ve prepared a video tutorial to guide you on how to use this template effectively.