Presentation on theme: "Roadmap for Sourcing Decision Review Board (DRB)"— Presentation transcript:
1 Roadmap for Sourcing Decision Review Board (DRB) February 06, 2003PHASE 1IDENTIFY AND ASSESS SOURCING OPPORTUNITIESPHASE 2SOURCING STRATEGY DEVELOPMENT. RFP PREPARATION, HIGH LEVEL NEGOTIATION STRATEGYPHASE 3SUPPLIER SELECTION, NEGOTIATIONS AND CONTRACT DEVELOPMENTPHASE 4SOURCING IMPLEMENTATION AND INITIATE SUPPLIER RELATIONSHIPPHASE 5SUPPLIER RELATIONSHIP DEVELOPMENT AND MANAGEMENTStop, Hold, RecycleStop, Hold, RecycleStop, Hold, RecycleStop, Hold, RecycleRe-sourceDecision Review Board (DRB)Guidance Review Team may also be established by DRBDecision Review Board (DRB)Guidance Review Team may also be established by DRBDecision Review Board (DRB)Guidance Review Team may also be established by DRBDecision Review Board (DRB)Guidance Review Team may also be established by DRBDecision Review Board (DRB)Guidance Review Team may also be established by DRBDECISIONTEAMApproval of Analysis, Refined Business Case & Sourcing PlanApprove Supplier List, RFP, Sourcing Strategy and Negotiation PlanContracts and Implementation plans acceptable?All enabling actions taken to achieve estimated run-rate savings?Suppliers meeting performance expectations and providing competitive value?Phase 1APhase 1BPhase 3APhase 3BReduce Total Cost of Ownership through use of Strategic Sourcing Process.Negotiation successful?Approval Scope, Business CaseAnalyze spend data, market intelligence and supplier performance data to identify potential sourcing opportunitiesImplementation teamsSupplier integrationSupplier relationship developmentMetrics definedSupplier management planIdentify Sourcing StrategyIdentify Technical and Commercial AlternativesRFP PreparationHigh Level Negotiation StrategyEvaluate suppliersNegotiationsBusiness Case refinementImplementation planningSBU buy-inSupplier performance assessment12 critical success factorsIssue Resolution ProcessCompetitive assessmentsMarket analysisSavings trackingJoint Business Execution PlanImplementation Rollout LessonsCommodity and supplier analysis, Performance Measurement, Gap Closure PlanDELIVERABLESAT MAJORREVIEWSCharter & Scope, Timeline, Stakeholder AnalysisHere is a more detailed chart - the boxed areas showing where we have added focus items in phases 3,4,5. We’ll talk about those focus items in a little bitTCO Model, Sourcing StrategyRFI, Business Case, RFP, Negotiation PlanNegotiation Strategy,Sourcing RecommendationSupplier Agreement, Implementation plansSigned Agreements, SM&I Transition Plan, Lessons Learned, Cost Savings ModelBusiness Assessment & Business Assessment SummaryWORK TEAMSourcing TeamSupplier Management andIntegration TeamSourcing TeamSourcing TeamImplementation TeamPhase 1ADevelop team charterIdentify scope of sourcing effortEstablish timelineIdentify & analyze key stakeholders including communications planCollect dataCurrent spend / usage volumes by Opco/BUEstimate of potential savingsSignificant commercial / operational risks to sourcing identifiedOn-going negotiations & current agreementsPhase 1BContinue data collection / further definitionIdentify current processes/specificationsIdentify benchmarks, best practices & lessons learnedPerform Initial Market Assessment including SBSD and local contentIdentify Sourcing StrategyDevelop high level business assessment (TCO & first cost savings opportunities, “cost to change” assessment)Obtain Opco / User endorsement to proceedPlan for Phase 2 including Schedule, Costs, Funding, Deliverables, Required PersonnelDevelop TCO modelDevelop, evaluate & recommend technical alternatives (Demand-side)Develop, evaluate & recommend commercial alternatives (Supply-side)Complete Market Analysis/AssessmentDevelop & send RFI and pre-qualification questionnaire to suppliers (if required)Refine stakeholder analysis and execute engagement plan as appropriateRefine commercial / operational risks to sourcing effortDevelop / execute risk mitigation planEvaluate RFI responses and develop short list of suppliersRefine Sourcing StrategyIdentify potential Supplier CategorizationDevelop Request For Proposal (RFP)Select suppliers for RFP participationDevelop Business CaseReview and apply applicable Lessons LearnedCapture new Lessons LearnedPhase 3ASupplier Selection criteria developed, RFP sent, responses evaluatedSelect suppliers for negotiationsDetailed negotiation plan/strategy and scopeDevelop contract terms & conditions/Negotiate with suppliersEngage stakeholders & Validate Relationship categorizationPhase 3BPREPARATION FOR IMPLEMENTATIONComplete negotiations with suppliersCommunicate Business Case, Agreements & Obtain Buy-inClear overall and Local-Specific Business CaseGlobal/local implementation planDialogue with Local/Local buy-in for implementation securedIdentify Implementation Team & implementation PlanTeam members / sponsors at Global / Local levels named, Team to see new agreement(s) through implementation, Name Supplier representatives to implementation teamDevelop Specific Implementation PlansDevelop detailed global and Local implementation plans,Validate Supplier categorization (strategic, core, preferred)Set expectations, performance metrics and supplier management activityChange management and Supplier Management plan is acceptable to Opcos / Locals, develop & deploy CPDEP for Change Program (if warranted)Resources are ready, All hand-offs addressedPhase 4AUtilize agreementLocal-specific terms in placeExpectations communicated to all customersTransition to new supplier - if applicableEnsure new agreement being utilized as intendedEnsure / Verify / Report savings resultsVerify business caseEnsure forecasted savings are being realizedIdentify and resolve gapsImplementation Look back & transition to Supplier ManagementReview and document lessons learned in implementationEnsure key performance issues resolvedRecognize, reward and publicize completion of implementationJointly draft charter for supplier relationship teamPhase 4BForm and Charter SM&I TeamGlobal and Local team sized and structured appropriately, sponsors named, charter validatedDevelop Joint Business Plan with Supplier(s)objectives, strategies, goals (win/win), metrics, tactical plansIdentify / prioritize TCO and Operational Excellence opportunitiesEnsure High Performance BehaviorsMeasure and monitor behaviorsUtilize 12 critical success factorsCore Relationships expected to be level 3 or higher for eachStrategic relationships to be level 4 or higher for eachUtilize issue resolution processMeasure and Ensure ResultsRoutinely track and report metrics aligned with 4+1Include TCO savings & Operational ExcellenceEvaluate value of RelationshipCost Benefit analysisCompetitivenessHealth of relationshipUse of resourcesTeam and support structureDegree of integrationAdditional opportunitiesFOCUS AREAS & FOCUS ITEMSAreas team needs to considerSpecific tasks to get information needed to make the decision1
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