Lesson 6 (simplified) Flashcards
Sourcing
finding sources of supply, gauranteeing continuous supply, alternative sources
purchasing management
manage supplier relationships
strategic sourcing process
assess opportunities > profile internally and externally > develop the sourcing strategy > screen suppliers and create selection criteria > conduct supplier selection > negotiate and implement agreements
spend analysis
better understand spending patterns and identify for improvement
category profile
understand all aspects of a sourcing category that could have an impact on sourcing strategy
industry analysis
understanding characteristics of external supply base
develop sourcing strategy
make-or-buy decision, total cost analysis, portfolio analysis, single sourcing, multiple sourcing, cross sourcing, dual sourcing
make-or-buy decision
provided internally or by external partners
insourcing: provided by firm
outsourcing: use of partners
total cost analysis
Identify major costs associated with sourcing options
direct: tied directly to operations/supply chain
indirect: not tied directly
portfolio analysis
used to develop a sourcing strategy based on the value potential and relative complexity or risk
- routine quadrant: readily available
- leverage quadrant: strandardized and readily available
- bottleneck quadrant: unique/complex, supplied by few suppliers
- critical quadrant: unique/complex, supplied by few suppliers, large 5 of total sales
single sourcing
depends on single company for nearly all items
multiple sourcing
multiple suppliers
cross sourcing
single supplier for certain part, other supplier for similar part
dual sourcing
two suppliers for same item
criteria to evaluate suppliers
- process and design capabilities
- management capabilities
- financial condition and cost structure
- longer-term relationship potential
