Source-To-Contract
The term “source-to-contract” (S2C) is used to describe the process of procuring goods and services from external suppliers. It includes all activities from identifying and assessing potential suppliers, through to negotiating contracts and awarding business to them.
The aim of S2C is to ensure that the best possible value for money is obtained from external suppliers. To do this, S2C must be an efficient and effective process that delivers the right goods and services at the right time, at the right price.
There are many different models and frameworks for managing S2C, but they all share some common elements. These include:
• Defining requirements: What does the organization need? This must be done in a way that allows potential suppliers to understand what is required and respond accordingly.
• Identifying potential suppliers: Who can provide what is needed? Organizations should consider both new and existing suppliers when looking for sources of supply.
• Assessing supplier capabilities: Can the supplier provide what is needed? Organizations should assess supplier capabilities against their own requirements to identify any gaps.
• Negotiating contracts: What terms and conditions will apply? Once a supplier has been selected, organizations need to agree on commercial terms and conditions. This includes prices, payment terms, delivery schedules, etc.
• Awarding business: Who will get the work? The final step in S2C is awarding business to the chosen supplier.