Strategic Sourcing Study Guide Questions Flashcards
According to the experts what is the definition of Strategic Sourcing? (pg 1)
Organizational procurement and supply management process used to locate, develop, qualify and employ suppliers that add maximum value to the buyers’ products or services.
What is the main objective of Strategic Sourcing? (pg 1)
To locate and form relationships with those suppliers that best promote the strategic and operational goals of your organization.
How can Strategic Sourcing be used as an approach to supply chain management? (pg 1)
Formalizes the way information is gathered and used so that an organization can leverage its consolidated purchasing power to find the best values in the marketplace.
Why might you want to limit the amount of suppliers in your fleet? (pg 2)
It allows you gain leverage and purchasing power for the procurement of quality vehicles at the best price.
Describe the differences between traditional sourcing and strategic sourcing (pg 2)
Traditional Sourcing Focus = Cost
Strategic Sourcing Focus = Competence
Table on Page 2
What are the benefits of Strategic Sourcing? (pg 2)
There is a limited number of suppliers. Limited vehicle providers may yield a number of benefits including lower prices for paying in bulk.
By consolidating the number of suppliers you become a more desirable customer by making larger purchases and dealing repeatedly with the same buyer.
What Risks are involved with Strategic Sourcing? (pg 3)
Overpaying Initial Costs
Time
Supplier requirements are too strict or narrow. This possibly can lock out potentially great suppliers from consideration or restrict vendors from becoming suppliers.
Potential Change of Suppliers
What are the 5 Steps in the Strategic Sourcing Process? (pg 4-5)
Understand The Spend Category Access Potential Suppliers Create a Strategy Select a Supplier Cultivate Relationships.
What should the purchasing team do during the first phase of the Strategic Sourcing Process - Understand The Spend Category (pg 4)
Identify their purchasing and price constraints, the time and money it takes for the supplier to acquire the assets, as well as historic purchases in the asset categories.
What do you want in a Strategic Sourcing Partner? (pg 5)
Suppliers that are competent, trustworthy, communicative, and those that offer deals that are valuable and fairly priced.
How can you create a strategy for Strategic Sourcing - Create Strategy (pg 5)
Identify how competitive the supplier market place is and ensure that other departments are on board with your supplier choices.
What tool is discussed in order to help select suppliers? - Select a Supplier (pg 5)
Balanced Scorecard
What are Performance Improvement Requirements and how are they used? (pg 5)
They improve the cycle time, cost, quality, and delivery performance both internally with your fleet and by the suppliers. They are crucial to keeping the buying and selling processes a positive experience.
What types of teams should be created in order to help select suppliers? (pg 6)
Cross-Functional sourcing teams to complete different supply chain management tasks and ensure collaboration as well as the ability to select suppliers most suitable for the organizations needs.
What systems should be developed and how can help the organization? (pg 6)
Purchasing Systems / Electronic Data interchange Systems that allow companies to communicate in real time with suppliers as well as manage a centralized location for data to be accessed.
