History Fifteen or twenty years ago companies only had purchasing departments. The procurement function was treated more like a need or a necessary evil. Therefore, when companies purchase goods and services, the main thing was to place a purchase order and receive the item or services. Not much thought has been given to leveraging suppliers or entering into long-term contracts to protect both the company and the supplier. About ten or twelve years ago or so, companies started to get smarter and reasoned that whatever goods they purchased it didn't make business sense to have too many suppliers. They thought that they should have a limited number of suppliers and that they should be able to manage that and understand what they were purchasing and how changes in the market affected what was being purchased, as well as what amount was being paid for what was being purchased. Additionally, companies should pay attention to how suppliers perform in carrying out their tasks: are they best in class, do they provide good service, cost, quality, etc.? These types of questions were, at best, part and parcel of conversation in the old days of shopping. Some companies were pioneers and handled these considerations well, while others simply cut purchase orders just to complete the purchase. Many companies have begun to rethink their sourcing practices and consider the practical, logistical and tactical benefits of strategic sourcing. If I were to estimate the current volume of companies optimizing strategic sourcing, it would be a modest estimate of around 20%, while another 20%, although on the path to strategic sourcing, groups do not reach the optimal level of financial leverage.. .middle of paper......the process, then that feat is not long for this world. But when suppliers share processes and functions with a company, regardless of whether they are good or bad, then the parent company benefits from the lessons learned and becomes wiser and stronger in the process. Ultimately, what matters is the relationship: whether it is a strategic alliance or a partnership, companies rely on ethical behavior and integrity of negotiations to exploit market advantage and growth, as well as the joy of do business with a reliable and trustworthy supplier. Strategic sourcing is a critical component because companies consider suppliers as an integral part of their production, in particular; suppliers often represent 50 – 90% of the total cost base. Many times, suppliers represent the largest part of not only the cost, but also the ability to provide goods and services to a core company's customers (7:08).