SCM 4351 Notes
SCM 4351
6/6/12
• Is strategic sourcing and sourcing strategically the same thing? No, the difference is strategic sourcing is seven-step process, a very technical, formal, and systematic process that affords you the opportunity to be able to negotiate with supplier with maximum leverage, it is a powerhouse. Companies will save 2-25% by going through this process. Sourcing strategically is the old procurement, not formal step-by-step process, look at needs in the short term.
• We are NOT sourcing strategically, we ARE focusing on strategic sourcing
• Yellow cell-how much money you save a company
• Spend analysis manipulate data that can guide decision-making. How much does a company spend (typically on an annual basis), where did they spend it, how did they spend it.
• Supply market assessment-looking at what is going on in our particular commodity product. Looking at it from a macro (industry as a whole, what is going on with the economy) perspective
• Total cost analysis-minimize cost but looking for a fair price, use should-cost modeling to help determine this. The should-cost provides information and information is power and will ultimately help with negotiation
• Supplier evaluation-figure out how many suppliers can supply us with what we need. Then narrow it down by SQDC (safety, quality, deliverability, and cost)
• Sourcing strategy-using a portfolio matrix to figure out where the commodities should fall. Based on previous steps, this is how we will execute
• Supplier negotiation-90% of negotiation is in the prep phase. Now we are negotiating the contract, document here is how much we saved
• Supply strategy implementation-Critical step, all negotiations are theoretical, thus if not implemented corrected or no one operates off of it, they no longer matter
• Track results-we return to these contracts not only continuously but also perpetually, we want to track the results, we want to audit savings. This is a feedback loop revisit the same
6/6/12
• Is strategic sourcing and sourcing strategically the same thing? No, the difference is strategic sourcing is seven-step process, a very technical, formal, and systematic process that affords you the opportunity to be able to negotiate with supplier with maximum leverage, it is a powerhouse. Companies will save 2-25% by going through this process. Sourcing strategically is the old procurement, not formal step-by-step process, look at needs in the short term.
• We are NOT sourcing strategically, we ARE focusing on strategic sourcing
• Yellow cell-how much money you save a company
• Spend analysis manipulate data that can guide decision-making. How much does a company spend (typically on an annual basis), where did they spend it, how did they spend it.
• Supply market assessment-looking at what is going on in our particular commodity product. Looking at it from a macro (industry as a whole, what is going on with the economy) perspective
• Total cost analysis-minimize cost but looking for a fair price, use should-cost modeling to help determine this. The should-cost provides information and information is power and will ultimately help with negotiation
• Supplier evaluation-figure out how many suppliers can supply us with what we need. Then narrow it down by SQDC (safety, quality, deliverability, and cost)
• Sourcing strategy-using a portfolio matrix to figure out where the commodities should fall. Based on previous steps, this is how we will execute
• Supplier negotiation-90% of negotiation is in the prep phase. Now we are negotiating the contract, document here is how much we saved
• Supply strategy implementation-Critical step, all negotiations are theoretical, thus if not implemented corrected or no one operates off of it, they no longer matter
• Track results-we return to these contracts not only continuously but also perpetually, we want to track the results, we want to audit savings. This is a feedback loop revisit the same