Lecture 3 Flashcards
category sourcing
- process by which firms develop and implement their strategies to groups of services and product that they buy
- defines sourcing objectives
- how the company will select and interact with its supply base
category management
continuous process in which different departments collaborate to identify and implement improvements
sequence of strategic alignment
- business goals
- performance objectives
- category sourcing strategies
- supplier selection criteria
- contract performance terms
- supplier performance criteria
- -> each step has to be completed in order to get to the next step
six buckets approach
- product/ process structuring
- supply base structuring
- sourcing
- contracting
- supplier development
- supply chain considerations
product/process structuring
- defining the kind of products we want to buy
- such as design, specifications, standard
supply base structuring
- defining the number of suppliers
the location, type, supplier networks, role of the supplier
sourcing
- deciding whether we want to insource or outsourcer
how to allocate volume across suppliers
supplier segmentation
tco
contracting
- how our contracts will look like
- local vs corporate
- length, duration
- terms and conditions
Supplier development
- what are the best in class targets we want to set
- how are we helping suppliers meet those targets
supply chain considerations
our forecasting plans, methods, and inventory locations
standard classification systems
- segment
- family
- class
- category/commodity
four main category sourcing strategies
- performance based partnership
- competitive bidding
- secure supply + search for alternatives
- systems contracting + E-procurement solutions
performance based partnership
- this is for strategic products
- you want to keep this kind of suppliers close to you to innovate and improve quality
- usually 1 or 2 suppliers
- critical for products cost price, dependence on suppliers
competitive bidding
- have several suppliers and keep them aware of the other suppliers
- for leverage products
- substitution is possible
secure supply + search for alternatives
- for bottleneck products
- you want to find suppliers in new regions
- monopolistic market
- large entry barriers
systems contracting + E procurement solutions
- for routine products
- large product variety
- labor intensive
- getting products in an efficient way
- high logistics complexity
model from the suppliers view
- two key factors:
- relative value
- account attractiveness
4 types of customers from the suppliers view
- core customers
- exploitable customers
- development customers
- nuisance
core customer
- defend position as supplier
- cosset the customer
- high service and response
nuisance
- divest position
- give low attention
- lose without pain
- low interest
development
- develop position
- nurture client
- expand business
- seek new opportunities
exploitable
- exploit customer
- seek short term advantages
- drive premium price
- risk losing the customer
