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Managing Procurement and Sourcing Getting What You Need.

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Presentation on theme: "Managing Procurement and Sourcing Getting What You Need."— Presentation transcript:

1 Managing Procurement and Sourcing Getting What You Need

2 GSCM Ch 3 - 2 Global sourcing Global Sourcing Benefits Factor- input Market access Risk Factors Quality Ethical concerns Patent protection

3 Supply management Aims/objectives Process of sourcing & procurement Supplier selection Supplier management

4 Aims/Objectives The primary goals/objectives of purchasing are: – Ensure uninterrupted flows of raw materials at the lowest total cost, – Improve quality of the finished goods produced, and – Optimize customer satisfaction. Purchasing contributes to these objectives by: – Actively seeking better materials and reliable suppliers, – Work closely with and exploiting the expertise of strategic suppliers to improve quality and materials – Involving suppliers and purchasing personnel in new product design and development efforts.

5 GSCM Ch 3 - 5 The sourcing process

6 Conduct internal needs analysis  Item to be sourced; characteristics; import restrictions; volume Conduct market assessment of suppliers  PEST analysis of country; risks (threats) and opportunities Collect supplier information  Reputation; financials; references Develop sourcing strategy  Strategic alliance?; level of collaborating Negotiate with suppliers  Price; quality; delivery times Implement supply chain improvements  Develop key performance indicators (Kpi) The sourcing process

7 GSCM Ch 3 - 7 Adapting the process Spend-driven approach  Analysis of every sourced good or service  Suppliers selected to meet company’s spend profile Risk-driven approach  Placing a trial order  Avoiding high-risk countries  Having more than one supplier  Negotiate conditional payment terms

8 GSCM Ch 3 - 8 Efficient sourcing

9 GSCM Ch 3 - 9 Efficient sourcing Total acquisition cost analysis (TAC) Supply base rationalization and consolidation Primary and secondary sourcing E-procurement

10 GSCM Ch 3 - 10 Partnerships and alliances Benefits of supply chain partnerships Foundations for good partnerships Common types of supply chain partners  Vendor Managed Inventory (VMI)  Collaborative planning, forecasting and replenishment (CPFR)

11 GSCM Ch 3 - 11Outsourcing Benefits Importance of knowing an organization’s core competencies Types of agreements:  Equity joint venture  Equity strategic alliance  Non-equity alliance  Franchising  Production and assembly  Legal services  Technical training

12 GSCM Ch 3 - 12Outsourcing Benefits  Cost savings  Gaining outside expertise  Improving customer service  Ability to focus on core competencies  Obtaining outside technology Disadvantages Possibility of increased costs Loss of company control Negative impact on employees Negative impact on customers Relationship problems

13 GSCM Ch 3 - 13 Negotiating with suppliers or outsourcers Priority negotiating elements  What volume is being purchased?  Discounts available?  Are logistical and importing costs covered in the price?  What does the price include?  What are the responsibilities of each party involved? Method of payment and documentation Payment terms Ensuring receipt

14 GSCM Ch 3 - 14 Compliance with international law: Export regulations Export control Exchange control licenses Export quotas Export documentation  Commercial invoice  Bill of lading  Export declaration  Packing list  Insurance document  Certificate of origin

15 GSCM Ch 3 - 15 Compliance with international law: Import regulations Importers liability Import quotas Antidumping legislation Tariff classification Import documentation  Commercial invoice  Bill of lading  Import declaration  Packing list  Insurance document  Certificate of origin

16 GSCM Ch 3 - 16 Customs brokers What is a customs broker? What services do customs brokers offer? How should my organization choose a customers broker?

17 GSCM Ch 3 - 17 Becoming a supplier Benefits Locating opportunities Tips for responding to an RFP/RFQ Bidding realistically Export contracts Binding agreements and contracts

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