Strategic sourcing and corporate social responsibility: Aligning a healthcare organization's strategic objectives. Issue 2 (March 2017) - Knight, Amy K.
Abstract: Strategic sourcing has long been utilized by organizations to maximize budget efficiency. The process includes a spend analysis, which historically has been performed by identifying the commodities and services purchased that resulted in the greatest spend, and establishing contracts with suppliers for these items in an effort to decrease the overall price through quantity discounts. This process restricts the data used in the spend analysis process to basic transactional information, and has not considered corporate social responsibility objectives as part of the strategic sourcing process. This paper modifies an existing spend analysis process framework, and applies the framework in a case study that uses additional data points to identify opportunities that allow an organization to simultaneously achieve both strategic purchasing and social responsibility objectives. The case study uses healthcare purchasing data from eight Department of Veterans Affairs medical centers. The goal of the model generated using regression analysis in the case study is to determine the buy characteristics that are most likely to generate mandated savings within the medical centers, in conjunction with achieving sustainability goals. The extensions of the regression model were examined to determine how collaborative buyer/supplier relationships can achieve organizational strategic objectives. Highlights: A spend analysis framework that aligns corporate social responsibility initiatives with strategic sourcing initiatives is proposed. A data driven spend analysis targets ideal strategic sourcing opportunities that also allow an organization to realize sustainability objectives. The framework was tested using acquisition data from eight medical centers.