The second step includes frequent assessment of the supplier market for pursuing substitute suppliers to present incumbents. A thorough study of the supplier marketplace dynamics and current trends is done. The major element of the design of the key product is should-cost. Along with it, an analysis of the major suppliers’ sub-tier marketplace and examination for any risks or new opportunities are also important.
Now, it is not recommended to analyse the should-cost for every item. There are many instances where conservative strategic sourcing techniques tend to work better. But in the instances where the application of strategic sourcing is not applicable, the should-cost analysis supplies a valuable tool that drives minimising of cost and regular progress efforts of the supplier.