Since the 1980s many Hong Kong toy companies have transferred their manufacturing operations to China in order to take advantage of not only low labor and land costs, but also a sufficient labor force, a situation which is difficult to obtain in Hong Kong. Nowadays, many indigenous Chinese toy companies are well developed which can pose a threat to Hong Kong toy companies, particularly in price. In spite of this, Hong Kong toy companies are still competitive in design capability, product quality, responsiveness, customer services and delivery. Many Hong Kong toy manufacturing activities are sourced to tier suppliers. Through Strategic Sourcing, to improve the sourcing performance in terms of product quality, price and delivery, Hong Kong toy companies can compete with Chinese toy companies and satisfy customers' needs. In this paper, a self-assessment system in Strategic Sourcing has been developed for the Hong Kong Toy Industry to self-assess their Strategic Sourcing. The Self-assessment System has been validated by six Hong Kong toy companies and the results provide information including scores, current performance status, and a strength and weakness profile. By interpreting the results, Hong Kong toy companies can develop an improvement plan by utilizing the self-assessment system as a tool and guideline to formulate appropriate strategies to improve themselves in Strategic Sourcing which, in turn, helps to improve the product quality, price and delivery in order to compete in the toy manufacturing sector. (c) 2006 PICMET.