International Purchasing
ESCA Ecole de Management
By : Hadj messaoud KHABTOU
© 2013
Session 3 : February 12th, 2013
Last Session Reminder
Last Session Reminder
© 2013
2
Strategic decision vs Operationnal decisions
• Strategic decisions are long-term decisions that have major consequences throughout an organisation; • Tactical decisions are medium-term decisions that have less serious consequences for parts of the organisation; • Operational decisions are short-term decisions that have relatively minor consequences for specific activities.
© 2013 3
The Strategic alignment
• Purchasing strategy supports the Business Strategy • And higher strategies • And other Functional Strategies • Strategic alignment occurs when all the strategies in an organisation support each other and work coherently together to achieve the overall mission.
© 2013
4
Translating Objectives to Goals
• Be a low cost operator
– Reduce purchasing costs • Reduce material costs by 15% next year
– Reduce administrative overheads by 20% next year
• Supply high technology products
– Produce a stream of new products
• Outsource non-core activities – Qualify two new suppliers this year
5
© 2013
Steps to Purchasing strategy Design
1. 2. 3. 4. 5.
Analyse the purpose of the business Analyse the purchasing function Analyse the purchasing environment Design the supply strategy Implement the results
© 2013
6
Portfolio Analysis : Kraljic’s Supply Matrix
Kraljic’s Supply Matrix
© 2013
7
Portfolio Analysis : Kraljic’s Supply Matrix
Supply Profit
Maximize cost advantage Concentrate needs Active Sourcing Auctions ( E )
Make or Buy ? International sourcing Heavy Negotiation Substitute Products Qualify new suppliers Co design
The Less is the More Minimize purchasing administrative costs Minimize purchasing efforts
Ensure Supply Continuity Stock holding VMI Insourcing
More process automation
Delegated, De centralized purchasing
By : Hadj messaoud KHABTOU
© 2013
Session 3 : February 12th, 2013
Last Session Reminder
Last Session Reminder
© 2013
2
Strategic decision vs Operationnal decisions
• Strategic decisions are long-term decisions that have major consequences throughout an organisation; • Tactical decisions are medium-term decisions that have less serious consequences for parts of the organisation; • Operational decisions are short-term decisions that have relatively minor consequences for specific activities.
© 2013 3
The Strategic alignment
• Purchasing strategy supports the Business Strategy • And higher strategies • And other Functional Strategies • Strategic alignment occurs when all the strategies in an organisation support each other and work coherently together to achieve the overall mission.
© 2013
4
Translating Objectives to Goals
• Be a low cost operator
– Reduce purchasing costs • Reduce material costs by 15% next year
– Reduce administrative overheads by 20% next year
• Supply high technology products
– Produce a stream of new products
• Outsource non-core activities – Qualify two new suppliers this year
5
© 2013
Steps to Purchasing strategy Design
1. 2. 3. 4. 5.
Analyse the purpose of the business Analyse the purchasing function Analyse the purchasing environment Design the supply strategy Implement the results
© 2013
6
Portfolio Analysis : Kraljic’s Supply Matrix
Kraljic’s Supply Matrix
© 2013
7
Portfolio Analysis : Kraljic’s Supply Matrix
Supply Profit
Maximize cost advantage Concentrate needs Active Sourcing Auctions ( E )
Make or Buy ? International sourcing Heavy Negotiation Substitute Products Qualify new suppliers Co design
The Less is the More Minimize purchasing administrative costs Minimize purchasing efforts
Ensure Supply Continuity Stock holding VMI Insourcing
More process automation
Delegated, De centralized purchasing