33:799:301 Lecture Notes - Lecture 3: Spend Analysis, Strategic Sourcing, High Tech
7 Feb 2017
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Document Summary
Strategic sourcing - an approach to supply chain management that formalizes the way information is gathered and used so that an organization can leverage its consolidated purchasing power to find the best possible values in the marketplace. Requires data analysis of what an organization buys, from whom, at what price and volume. Places emphasis on entire life-cycle of product, not just initial purchase price. Identifies key suppliers for the organization"s critical supply needs. Deliver more innovative products quickly & less costly than competitors. Companies develop and implement strategic sourcing initiatives to: Manage purchasing transactions in a strategic way, analyzing and selecting partners based on the overall needs of the organization. Successful sourcing strategies are different for functional products & for innovative products. Functional products - mro items & other commonly low profit margins with relatively stable demands and high levels of competition. Innovative products - characterized by short product life cycles, volatile demand, high profit margins, and relatively less competition.
