Scribd
Upload
736 views20 pages

Sourcing Strategy: DR U Bahadur Spjimr

The document discusses strategies for developing an effective sourcing strategy. It recommends segmenting suppliers into different groups based on factors like economic opportunity and exposure to market risk. Suppliers providing bottleneck, nuisance, leverage, and strategic items require different strategies. These include ensuring supply continuity, automating routine processes, driving sharp bargains, and developing long-term strategic partnerships. The document also outlines strategies for different types of supplier-product combinations, such as capability enhancement, classical development, cost reduction, and market scanning. The goal is to construct a portfolio of sourcing strategies tailored to specific supplier-product situations.

Uploaded by

chhavib
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
736 views20 pages

Sourcing Strategy: DR U Bahadur Spjimr

The document discusses strategies for developing an effective sourcing strategy. It recommends segmenting suppliers into different groups based on factors like economic opportunity and exposure to market risk. Suppliers providing bottleneck, nuisance, leverage, and strategic items require different strategies. These include ensuring supply continuity, automating routine processes, driving sharp bargains, and developing long-term strategic partnerships. The document also outlines strategies for different types of supplier-product combinations, such as capability enhancement, classical development, cost reduction, and market scanning. The goal is to construct a portfolio of sourcing strategies tailored to specific supplier-product situations.

Uploaded by

chhavib
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
You are on page 1/ 20

SOURCING STRATEGY

Dr U Bahadur
SPJIMR
WHY A STRATEGY FOR SOURCING
NEED FOR SOURCING STRATEGY

• CORE COMPETENCE
• LACK OF SOURCES
• LIMITATIONS OF EXISTING SOURCES
-TECH CAPABILITY AND TECHNOLOGY LEVEL
-CAPACITY TO MEET DEMAND
-CONSISTENCY OF QUALITY
-COST
• COST REDUCTION
-MAKE OR BUY OPTIONS
-DISTANCE FROM EXISTING SOURCE
• GLOBAL SOURCING IMPERATIVES
• GOVT. REGULATIONS / INCENTIVES
• LOCAL ASPIRATIONS
• SPECIALISATION AND SOPHISTICATION
• FLEXIBILITY IN ADOPTING CHANGE
• PEOPLE MANAGEMENT
SOURCING STRATEGY
SEGMENTED PURCHASING STRATEGY AND
VENDOR GROUPING
HIGH
RISK
EXPOSURE TO MARKET

LOW HIGH
ECONOMIC OPPORTUNITY
RELATIVE VALUE
ITEMS IN FIRST QUADRANT:

• PRODUCT STANDARDISATION
• ORDER VOLUME/OPTIMIZATION
• EFFICIENT PROCESSING
• INVENTORY OPTIMIZATION
• PAPER LESS ORDERING
• SYSTEMS CONTRACTING
• CREDIT CARDS
• PROCESS AUTOMATION MIN RESOURCE

NUISANCE / ROUTINE ITEMS


SOURCING STRATEGY
SEGMENTED PURCHASING STRATEGY AND
VENDOR GROUPING
HIGH
EXPOSURE TO MARKET RISK

NUISANCE ITEMS
•MINIMISE ATTENTION
•AUTOMATE
AUTOMATE
LOW
LOW HIGH
ECONOMIC OPPORTUNITY
VALUE
THIRD QUADRANT

FEATURE
LESS SUPPLIERS LOW BUYER STRENGTH.
VOLUME INSURANCE AT COST PREMIUM.
INVENTORY HOLDING
LTC
VENDORS.RETENTION
ALIGN PROCESSES
CONTROL OVER VENDOTR
ITEM SPECIFICATION
GLOBAL SOURCING.
BACK UP PLANS.
BOTTLENECK ITEMS
SOURCING STRATEGY
SEGMENTED PURCHASING STRATEGY AND
VENDOR GROUPING
HIGH
BOTTLENECK ITEMS
EXPOSURE TO MARKET RISK

•LTC
•ALIGN PROCESSES
ENSURE SUPPLY

NUISANCE ITEMS
•MINIMISE ATTENTION
•AUTOMATE
ROUTINE

LOW
LOW HIGH
ECONOMIC OPPORTUNITY
VALUE
SECOND QUADRANT

MORE SUPPLIERS ,HIGH BUYER STRENGTH.


EXPLOITATION OF FULL PURCHASE POWER.
NEGOTIATION STRATEGIES
VENDOR SELECTION .
PRODUCT SUBSTITUTION
TIN-BOTTLE-CARTON-POLY PACK
TARGET PRICING
ORDER VOLUME OPTIMIZATION

LEVERAGE ITEMS
SOURCING STRATEGY
SEGMENTED PURCHASING STRATEGY AND
VENDOR GROUPING
HIGH
BOTTLENECK ITEMS
EXPOSURE TO MARKET RISK

•LTC
•ALIGN PROCESSES
ENSURE SUPPLY

NUISANCE ITEMS COMMODITIES


•MINIMISE ATTENTION DRIVE FOR SHARP
•AUTOMATE BARGAIN
AUTOMATE
LEVERAGE
LOW
LOW HIGH
ECONOMIC OPPORTUNITY
VALUE
FOURTH QUADRANT

• ACCURATE DEMAND FORCASTING.


• DETAILED MARKET RESEARCH.
• DEVELOPMENT OF LONG TERM SUPPLY
RELATIONSHIP.
• RISK ANALYSIS/ CONTIGENCY.
• LOGISTICS/INVENTORY/VENDOR CONTROL.
• LESS SUPPLIERS,HIGH BUYER STRENGTH.
STRATEGIC ITEMS:
SOURCING STRATEGY
SEGMENTED PURCHASING STRATEGY AND
HIGH VENDOR GROUPING
EXPOSURE TO MARKET RISK

BOTTLENECK ITEMS STRATEGIC


LTC DEVELOP STRATEGIC
•ALIGN PROCESSES PARTNERSHIP
ENSURE SUPPLY

DEVELOP

NUISANCE ITEMS COMMODITIES


•MINIMISE ATTENTION DRIVE FOR SHARP
•AUTOMATE BARGAIN
ROUTINE LEVERAGE

LOW ECONOMIC OPPORTUNITY HIGH


LOW
RELATIVEVALUE
SOURCING STRATEGY
SEGMENTED PURCHASING STRATEGY AND
VENDOR GROUPING
HIGH
BOTTLENECK ITEMS CRITICAL ITEMS
EXPOSURE TO MARKET RISK

•ENSURE SUPPLY •DEVELOP STRATEGIC


•LTC PARTNERSHIP
•ALIGN PROCESSES
PROBLEM BOTTLENECK
STRATEGIC

NUISANCE ITEMS COMMODITIES


•MINIMISE ATTENTION DRIVE FOR SHARP
•AUTOMATE BARGAIN
ROUTINE
LEVERAGE
LOW
LOW HIGH
ECONOMIC OPPORTUNITY
Relative VALUE
SOURCING STATEGY
MATERILAS MANAGER’S PORTFOLIO

EN NN
PRODUCT

EE NE

SUPPLIER
STRATEGIES: (EE)

• JOINT COST REDUCTION INITIATIVE


• TARGET COSTING
• SUPPLIER INVOLVEMENT IN DESIGN AND
PLANNING.
• PROCESS INNOVATION
EXISTING SUPPLIER NEW PRODUCT FEATURES

FEATURES
1. STRONG AND RELIABLE SUPPLIER BASE
2. COLLABORATIVE RELATIONSHIP
3. MUTUAL TRUST
4. HIGH DEGREE OF INTERDEPENDENCE
5. LOCATIONAL ADVANTAGE
Strategy
Capability Enhancement
STRATEGIES: (EN)

• LONG TERM AGREEMENTS


• TECHNICAL COLLABORATION
• MUTUAL BENEFIT
• PROFIT SHARING AND FINANCIAL TIE-UPS
• SUPPLIER AS ENTREPRENEURIAL TEAM MEMBER
• INVOLVEMENT OF SUPPLIER FROM DESIGN
STAGE
• LEAD TIME REDUCTION
NEW SUPPLIER EXISTING PRODUCT

• FEATURES:
1. QUALITY CONSIDERATION
2. COST CONSIDERATION
3. VOLUME CONSIDERATION
4. LOGISTICS
5. CARTEL
• SOURCING STRATEGY:
MARKET SCANNING STRATEGY
NEW SUPPLIER NEW PORDUCT
• FEATURES:
-NO HISTORY
-RANDOM PRICING
• STRATEGIES:
-INFORMATION COLLECTION
--INFORMAL CHANNELS
--CATALOGUES/JOURNALS
-REQUIREMENT SPECIFICATION
-TRIALS / MULTIPLE SOURCES
-INVOLVE SUPPLIERS IN PRODUCT DEV.

SOURCING STRATEGY :
CLASSICAL DEVELOPMENT
MATERIALS MANAGER’S PORTFOLIO

EN
CAPABILITY CLASSICAL
ENHANCEMENT DEVELOPMENT
PRODUCT

COST MARKET
REDUCTION SCANNING

EE NE
SUPPLIER

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy