In current business environment, it is realized that strategic sourcing is one of the key drivers to create competitive advantage by reducing overall cost and providing differentiation. The primary purpose of this paper is to develop an integrative strategic sourcing process model for oil refinery. In this study, the process model was designed based on strategic sourcing theories, related papers and best practices. Subsequently, procurement personnel were invited for interviews to verify and validate the process model. Lastly, agreed model was applied to real business case. The final model contains nine main processes: spend analysis, strategic sourcing planning, internal profile and supply analysis, strategy formulation, supplier screening and request for proposal, negotiation and contract award, contracting and contract administration, supplier relationship management and strategy review. Resulting from implementation, firm could reduce total cost of ownership for Process Instrumentation products and services sourcing. The final conclusion of this study is that establishment of strategic sourcing process could benefit firm in terms of systematic sourcing approach improvement and overall cost reduction.
