The purpose of this study is to enhance understanding of strategic sourcing and to discuss the challenges in adopting strategic sourcing. First, a literature review is undertaken to identify the key, characterizing elements of strategic sourcing. This is followed by an analysis of the relationships between different elements of strategic sourcing using data from 140 U.S. manufacturing companies. Results indicate that strategic sourcing is based on the status of the purchasing function within the firm, the level of internal coordination of purchasing with other functions within the firm, information sharing with key suppliers and development of key suppliers.