Lecture 6 Sourcing Flashcards
Sourcing
finding sources in supply in order to guarantee the continuity of supply and finding alternative sources of supply
Strategic Sourcing process
1) Asses opportunities
2) Profile internally & externally
3) Develop sourcing strategy
4) Screen suppliers and create selection criteria
5) Conduct supplier selection
6) Negotiate and Implement agreements
Asses Opportunities
Spend analysis, understand spending patterns by analyzing purchasing data
Profile Internally and Externally
- Category profile, understand all aspects of sourcing category that could impact the sourcing strategy
- Industry Analysis, detailed understanding of the external supply base
Develop sourcing strategy
Make or Buy
Total cost analysis
Portfolio analysis
Insourcing Advantages & disadvantages
Advantages:
high degree of control
oversee entire product
economies of scale
Disadvantages:
Reduced strategic flexibility
high investment
suppliers may offer superior products
Out sourcing advantages & disadvantages
Advantages:
strategic flexibility
low investment risk
acces to state of the art products
Disadvantages: Possibility of choosing bad supplier Loss of control over the process Communication challanges Increased risk of supply chain disruption
Total cost analysis
quantify direct and indirect costs
Portfolio analysis
sourcing strategy based on value potential
Routine: reduce steering burder
Leverage: press on price
Bottleneck: avoid risk of dilivery
Critical: partnership
Kinds of sourcing
single sourcing
multiple sourcing
cross sourcing
dual sourcing
Supplier selection criteria
Process and design capabilities
Management capabilities
Financial condition and cost structure
Longer term relationship potential
Conduct supplier slection
Weighted point evaluation system
Supplier assesment
spreadsheets personal assesment vendor rating supplier audit cost modeling
