Strategic sourcing

Strategic sourcing

1. Buld the Team

   • Goal: Develop a scope of work and plan
     • Personnel from operations
     • Product design personnel
     • Process engineering personnel
     • Marketing, finance, and purchasing personnel

2. Market Reseach

   • Goal: Understand the supply market
     • A category spend analysis will drill down to a more granular level and identify the specific business units that are purchasing the products or services
     • Market internal Competition
       • Threat of New Entrants
       • Supplier Bargaining Power
       • Pressure from Substitutes
       • Buyer Bargaining Power

3. Strategy Develpment

   • Goal: Classify suppliers and defne sourcing approach
   • Quadrants Lead to Strategy, Then to Tactics and Actions
     • Portfolio analysis is a tool to structure and segment the supply base and is used as a means of classifying suppliers into one of four types
       • Critical Category—Strategic Supplier
       • Routine Category
       • Leverage Category-Preferred Supplier
       • Bottleneck Category—Transactional Supplier

4. Contract Negotiation

   • Goal: Negotiate a win-win contract
     • Establishing tasks and time lines
     • Assigning accountabilities and process ownership
     • Ensuring adequate resources are made available to the process owners

5. Supplier Relationship Management

   • Goal: Continuously improve performance
     • This individual must continuously monitor the performance of the sourcing strategy, as well as that of the supplier