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By now, you have developed a full analysis of your current supplier's cost structure, service levels, and contractual requirements. This has helped you turn data into useful information that you can now use to develop a preliminary sourcing strategy.

A preliminary sourcing strategy describes the course of action to take after completing the Data Collection phase. It defines the type of research to perform, the types of suppliers to contact, and the rationale for these decisions. Some factors to consider include the following:

 How many suppliers do we currently utilize?

 Are there other suppliers in the marketplace that provide this product or service?

 Do we have a contractual obligation with our current supplier? What happens if that obligation is not fulfilled?

 When was the last time we negotiated this contract?

 How integrated are we with the current supplier(s)? Will there be a high cost of change?

Does it make sense to aggregate all the spend in this category together or to look at components of it separately?

At this point in the process, you have probably developed a basic understanding of the marketplace, but you are by no means an expert. As you move into the research phase, you might find that your preliminary sourcing strategy was missing steps, or you might find that a different approach altogether is more appropriate. This is okay—the preliminary strategy is essentially a draft concept. The research process helps further refine and develop the strategy.