Certification in Supplier Diversity Practice Exam

What is the first step in formulating a supply strategy?

1. Conducting market research

2. Building internal consensus on value addition

3. Evaluating supplier performance metrics

4. Securing contracts with existing suppliers

The correct answer is: Building internal consensus on value addition

Building internal consensus on value addition is fundamental as it ensures that the supply strategy aligns with the organization's overall goals and objectives. This step involves engaging stakeholders across different departments to understand their needs and perspectives regarding supply requirements. Creating a shared vision for how suppliers can contribute value to the organization helps in recognizing the critical factors that should be prioritized when formulating the strategy. Achieving buy-in from all relevant parties is vital, as it fosters collaboration and reduces the likelihood of conflicts later in the process. By establishing a clear understanding of how supply decisions should support the organization's strategic objectives, the foundation is set for further steps, such as determining the right suppliers, evaluating market conditions, and establishing performance metrics. This alignment ultimately leads to more effective decision-making and a cohesive approach to supplier management.